Govt to introduce coal linkage auction for the regulated power sector

After clearing coal linkage auction for unregulated sectors, the government will soon initiate a similar exercise for the regulated power sector. Anil Swarup, Coal Secretary has said that the Union Ministry of Coal will come out with a linkage auction policy next month for power companies, which do not have coal linkages. He said that the policy on coal linkage auction for power sector was in the final stage of preparation and would be announced anytime next month.

Swarup said several steps, including reduction in import of thermal coal, improved fuel supply levels, better evacuation of pit head coal stock and restructuring of debt for power distribution companies had been initiated.

The Coal Secretary hoped that a large number of State distribution companies in the next six months would come under the UDAY scheme for restructuring of their debts and unleash demand for coal. He further added that once the financial position of Discoms improves after the implementation of UDAY, it will draw more power which in turn will lead to higher demand of coal.

The government is trying to supply more coal to power companies and trying to ensure that import demand from the companies in the hinterland is replaced with domestic supplies.  In the April-January period, India's coal import has already gone down by 16 per cent, which has resulted in Rs. 20,200 crore savings for the government. Swarup said due to lower coal import, the government is going to save Rs. 25,000-30,000 crore for the year 2015-16.