Coal news and updates

MoC to decide Lanco Babandh, DB Power linkage issues

September 9: The Standing Linkage Committee (Long –Term) or SLC-LT, in its latest meeting, has placed the ball in the court of the Ministry of Coal in the case of coal supplies to two power plants – Lanco Baband and DP Power - with which fuel supply agreements are yet to be signed by Coal India Ltd (CIL) under the Presidential Directive.
In the case of Lanco Babandh Power Limited’s 600-MW unit 1 in phase I, the committee recommended “the documents will be examined and an appropriate decision taken by the MoC”.

The company is setting up a 1,320-MW power plant for which it had been granted coal blocks for units 2 and 3 while for unit 1 it had been awarded a long-term coal linkage.

Consequently, the Coal Controllers Organisation (CCO) had furnished a quantification of coal linkage on a tapering basis which was granted to the 660-MW unit at Dhenkanal, Odisha by the SLC-LT in 2007.

The CCO had decided on the basis of the status report submitted by the company, indicating that the capacity associated with the coal block is phase 1 (2x660 MW), out of which 1,000 MW of the EUP is linked with the coal block.

However, on the suggestion of the state government, the company had reduced the capacity of the plant from 2,400 MW to 1,320 MW. However, it could not reply to the ministry when enquired on the consequent coal usage reduction.

The MoP and CEA have confirmed that only two units are coming up. The matter is being examined in the ministry and the SLC-LT is yet to take a view on the matter.

The company has informed that the capacity of the plant is 4x660 MW and that clarifications and files have been submitted.

The other instance is DB Power’s unit 2 tapering linkage from SECL. The panel recommended that the documents submitted by the company would be examined and an appropriate decision will be taken by the MoC within a month.

It may be recalled that the company had been granted a tapering linkage for 600-MW unit 2 of its 1,200-MW capacity. A company representative informed that it would take some more time to develop the coal block and requested extension of the tapering linkage which was valid till May 2014.

The MoC has sought clarifications on certain issues which are still pending. It was pointed out that the company had been granted a coal block for catering to a capacity of 1,000 MW whereas the total size of the plant was 1,200 MW. It could not be ascertained how the company had been given a long-term linkage for 600 MW. The CEA had said in 2008 that the coal block could sustain generation up to 600 MW. The FSA for the second 600 MW unit is still pending.

With regard to other units, the issue of FSA signing is still pending. These include tapering linkage for the KSK Mahanadi’s 600-MW unit 3 from ECL, Chandrapura unit 8’s 250-MW from CCL, long-term coal linkage for Abhijeet MADC Nagpur Energy’s 240-MW Mihan Unit 1-4, ACCPPL’s Athena Singhatarai 600-MW unit 1 and 300-MW unit 1 of Dhariwal Infrastructure. In all these cases, decisions have either been deferred or SLC has taken note of the current status.

It may be recalled that 177 LoAs had been issued by CIL and its subsidiaries for power projects to be commissioned during the 11th and 12th Five-Year Plans. These LoAs covered a capacity of 108,000 MW projects. Out of these, the CEA sought coal supplies in respect of projects worth 78,000 MW capacity.

Accordingly, a Presidential Directive had been issued to CIL. For these projects, FSAs had been signed for 172 units covering 134 LoAs. Out of this 78,000 MW capacity, CIL had signed 160 FSAs for a capacity of 73,075 MW.

The remaining 12 cases had issues with regard to ownership, extension of coal supplies beyond the period admissible under the Tapering Linkage policy etc.