Coal news and updates

LoA/linkage of old plant to be transferred to new unit: SLC

July 25: The government has decided to automatically transfer the letter of assurance/linkage granted to an old power plant, in case of the latter getting scrapped, to the new plant that will replace it.

The Standing Linkage Committee on Power (SLC-Power), at its meeting held on June 27 of this year, under the chairmanship of the Additional Secretary, Coal, has decided that LoA/linkage granted to the old plant shall be automatically transferred to the new plant of the nearest super-critical capacity. If the capacity of the new supercritical plant is higher than the old plant, additional coal may be accorded priority, subject to the availability of coal, on the best efforts of Coal India.

At least 50% of the capacity of the new super-critical plant has to be retired. For instance, for setting up super-critical plant of 1,000 MW, at least 500 MW capacity of the old plant has to be retired. Old plants can be clubbed together to achieve this minimum benchmark.

This policy shall be applicable to pre-NCDP plants in the public sector only, which have been granted linkages/LoAs.

These decisions were taken based on the recommendations of the Ministry of Power, that new plants will come up in a staggered manner by the end of the 13th Plan, and which may also spill over into the 14th Plan.

The SLC-Power also decided that automatic transfer of LoAs shall be permissible only when the new plant is set up within the state in which the old plant was located and was actually scrapped. It was also noted that the old plant would continue to operate till he date of commissioning of the new plant.