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Power Ministry urges to swap coal among units of same promoter

29 Oct 2012 Evaluate

With an aim to tackle the stringent coal availability, Power Ministry has urged Coal India to allow power plants run by the same promoter to swap coal among the plants. This will permit the companies having projects at multiple locations to transfer or swap allocated domestic coal linkages among its own plants and hence ensure smooth business activity.

The proposal reached to the Coal Ministry for vetting after the approval from the Power Ministry and Central Electricity Authority (CEA), while it was initially put forth by the Association of Power Producers (APP), a group of private power producers. The ministry also confirmed that the risk associated with the swap agreement would be borne by the power producer including less availability of coal for particular plant after coal mix optimization.

The private power producers anticipate that the proposed process will curtail the generation cost by pared freight charges and optimized plant performance. They also claim that the activity ensures that no review of Power Purchase Agreement (PPA) or its tariff is required and no additional obligation is claimed on Coal India.

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