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Business News/ Industry / Energy/  MoP lays down strict rules to ramp-up coal supplies to power projects
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MoP lays down strict rules to ramp-up coal supplies to power projects

Any failure to do will result in coal supplies to such states to be stopped

PLF is a measure of output of a power plant, with a higher PLF indicating more output at a lower cost. BloombergPremium
PLF is a measure of output of a power plant, with a higher PLF indicating more output at a lower cost. Bloomberg

NEW DELHI : As part of the union government’s attempt to ensure uninterrupted electricity supply from thermal power projects, captive coal mine production has been directed to meet 85% of their targets in a week and state electricity distribution companies (discoms) procuring power from imported coal fuelled projects have been asked to meet their demand from such plants within two weeks.

Any failure to do will result in coal supplies to such states to be stopped. Also, coal supplies to power projects having more than 10 days fuel stock but with a plant load factor (PLF) of less than 40% and those projects having more than 18 days stock will be stopped. In addition, coal supplies to those projects having stocks ranging from 11 days to 18 days and a PLF of more than 40% will be halved.

PLF is a measure of output of a power plant, with a higher PLF indicating more output at a lower cost. In a reflection of revival of economic activity in the country, India’s electricity demand reached its highest since July 2019 to register124.8 billion units (BUs) in July this year, according to India Ratings and Research. 

The coal stocks have depleted at thermal power plants due to reasons such as increase in demand for electricity and lower generation by hydropower plants.

 “Captive coal mine companies have been given a notice of one week to increase their production to more than 85% of their targets’.If they fail,the supply of linkage coal to such states/Gencos would be regulated," union power ministry said in a statement.

India’s power sector is the largest consumer of coal in the country, with state run Coal India Ltd (CIL) being the largest coal miner. Of India’s installed power generation capacity of 383.37 GW, the coal fuelled projects account for 53% or 202.67 GW.

 “Those States/DISCOMS who procure power from imported coal based power plants have been given a notice of two weeks to meet their power demand from these power plants.In case of failure, the supply of domestic coal to these Sates would be regulated," the statement added. 

These decisions were taken at a meeting held by union power secretary Alok Kumar and comes in the backdrop of India deciding to stop coal supplies for a week to plants having more than 14 days stock to free up around 1.77 lakh tonne of fossil fuel, to be redistributed to power plants having low stocks. India’s peak electricity demand recorded an all time high of 200.57 giga watt (GW) on 7 July. The demand is currently around 192-193 GW.

 “Power plants having coal stock of more than 10 days but where plant load factor is less than 40 %, coal supply would be regulated to the extent of 100%.The coal supply to the power plants having coal stock of more than 18 days will also be regulated to the extent of 100%.The coal supply to the power plants having coal stock ranging from 11 days to 18 days and having  PLF more than 40%, will be regulated to the extent of 50%," the statement said.

This follows after union power and new and renewable energy minister Raj Kumar Singh had asked power secretary to look at the possibility of  reducing the 14 days benchmark of coal stock at thermal power plants to 10 days for making more fossil fuel supplies to projects with “extremely depleted stocks."

The government is working to leverage the country’s entire installed electricity generation capacity to meet India’s growing demand. As part of this strategy it is facilitating short term coal linkage auctions for those projects not having power purchase agreements (PPAs). Of CIL’ coal production target of 670 million tonne (mt) for the current financial year, the demand from the power sector is expected to account for around 545 mt. India’s overall coal requirement is expected to go up to 1,123 mt by 2023 from the present level of 700 mt.

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Published: 06 Sep 2021, 08:37 PM IST
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