New Delhi: Power plants already in fuel supply agreements (FSAs) with state-run Coal India Ltd (CIL) or those having captive mines will be allowed to purchase the dry fuel through e-auction.
The move is aimed at ensuring adequate availability of coal for electricity generation.
“…it has been decided that those power plants may also be eligible for supply of coal under e-auction windows which have FSAs/MoUs (memorandums of understanding) and also those who have captive coal mines,” the Coal Ministry has said in a letter to the state-run company.
Under e-auction, coal is sold at the spot market price.
The ministry further said, “This implies that power plants already having FSA/MoU or coal blocks shall also be eligible to participate in these e-auction windows and their eligibility to draw coal under e-auction shall be to the extent of shortfall between its total requirement and the availability of coal from these sources.”
Therefore, total coal supplied to them should not be more than their requirement to serve long and medium-term power purchase agreements (PPAs).
The government had a few months back increased the quantity of coal that Coal India can sell through e-auction.
In the last fiscal year, 49 million tonnes (MT) of coal was sold through e-auction as Coal India was asked by the ministry to e-auction the surplus dry fuel from those mines that have been facing evacuation constraints.
“Coal which is found surplus at the said mines (having serious evacuation constraints) after meeting the requirement…shall be e-auctioned,” the Coal Ministry had earlier written to CIL.
There has been a large accretion of coal during this peak production season at mines which have serious evacuation constraints. At the same time, coal needed to be made available to the FSA holders on priority.
Coal India has missed its production target for the financial year 2014-15 by 3 per cent and achieved an output of just 494.23 million tonnes. The company’s target was 507 million tonnes for the fiscal year.