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Power ministry amends coal linkage policy for 12th plan

21 Jun 2011 Evaluate

Companies that sell power to states at a price discovered through competitive bidding would get coal supply during 2012-17. The power developers should have signed long-term agreement with state utilities for supplying 85% of a plant's capacity. An amendment has been in the coal linkage policy for 12th five year plan period beginning April 1, 2012. Actual supply of coal will be subject to 85% of power being tied up through long term power purchase agreements with distribution utilities through tariff based competitive bidding.

The ministry had in October 2009 notified a grading system as per which companies would be rated based on progress made in land acquisition, forest clearances and equipment orders placement. Each of the factors would be assigned a specific weightage and the power ministry before recommending them for coal linkages. Those with highest weightage points would get coal on priority basis.

The recent amendment to coal linkage policy is an addition to these criterions. The power ministry had decided that 60% of available coal would be earmarked for the central and state sector projects, including plants based on tariff based competitive bidding. Only 35 per cent of the coal earmarked for the power sector would go to private projects awarded planned for the 12th five-year plan. Captive power projects would receive the balance 5 per cent share.

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