In a move that could benefit coal-fired power projects aggregating 20,000 MW set to come up by the end of 2016 but without any assured supply of the fuel, the power ministry has proposed that to start with, they be given at least 50% of the normative coal requirement to run the plants at a plant load factor (PLF) of 85%. If the plan materialises, these power plants will have a benefit similar to the one enjoyed by scores of other post-2009 power plants with a combined capacity of 78,000 MW that, under government-mandated fuel supply agreements (FSAs) with Coal India, are assured comfortable levels of fuel supplies till end-FY17.
In a Cabinet note prepared by it, the power ministry has also said that supplies could be ramped up in due course depending on coal availability. If CIL cannot meet the supply requirements under the new FSAs out of its own production, it can import coal to make up for the shortfall and resort to price pooling to mitigate the impact of the high cost of imports on the power plants.
The note reviewed by FE says that since pooling is to be confined to post-2009 plants, in an an optimistic scenario assuming enhanced local production of the fuel, the increase in cost of power generation would be 74 paise per unit for 2014-15, 44 paise for 2015-16 and just 5 paise for 2016-17. Unlike FSAs signed earlier, the proposed ones won’t have a penalty clause for non-fulfilment of obligation on CIL, but this, the ministry said, could be reviewed after three years.
According to industry sources, the move could benefit Bajaj Hindusthan’s 1,980 MW Lalitpur project, GMR Energy’s 1,370 MW GMR Chhattisgarh project, Adani Power’s 1,320 MW Tiroda unit, Essar Power’s 1,200 MW Singrauli plant and Monnet Power’s 1,050 MW Malibrahmani project.
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These and other plants that are proposed to come under the new FSA regime have been or are to be commissioned in the 12th Five Year Plan (in fact all of these plants could be on stream latest by 2016-end). They have signed MoUs with CIL but don’t yet have even a letter of agreement (LoA) with the coal producer, not to speak of FSAs.
Following a presidential decree issued in April 2013, CIL started signing FSAs with specified post-2009 power plants and as on date, about