Coal news and updates

Coal India limits supply to old power plants in SHAKTI push

SHAKTI stands for Scheme to Harness and Allocate Koyla (Coal) Transparently in India. The objective of the scheme is to auction long-term coal linkages to power companies. Under the scheme, fuel is to be allocated to power plants holding letters of assurance (LoAs).

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However, coal supply above ACQ is possible only if conditions laid down by Coal India are fulfilled, government sources in the know told CNBC-TV18.

Gencos under the SHAKTI scheme, with pre-2009 fuel supply agreements (FSAs) and power purchase agreements (PPAs) over linked capacity are not bound by ACQ limit, government sources close to the development said.

Even for gencos not bound by ACQ limit, coal supply will be capped at 120 percent of ACQ, sources said.

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Coal India accounts for over 80 percent of the domestic coal output. The country is targeting a production of 911 million tonnes (MT) in the current fiscal. However, the total demand for coal in 2022-23 is estimated to be 1,087 MT. The demand for dry fuel from the power sector is expected at 775 MT, steel at 70 MT, and non-regulated sectors at 242 MT.

The government has taken various steps to augment domestic coal production. These include single window clearance, amendment of the Mines and Minerals (Development and Regulation) Act, 1957 to allow captive mines to sell up to 50 percent of their annual production after meeting the requirement of the end-use plants, and production through mine developer and operator (MDO) model.

Other initiatives include increasing the use of modern technologies, taking up new projects and expansion of existing coal mines, and auction of coal blocks to private companies and PSUs. Moreover, 100 percent foreign direct investment is allowed for commercial mining.

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(Edited by : Shoma Bhattacharjee)

First Published: Feb 16, 2023 6:50 PM IST

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