Government may auction power contracts with coal supplies

Government may auction power contracts with coal supplies

The government plans to auction power supply contracts with attached coal supplies, ease norms to allow coal usage for short-term power contracts and put in place a payment mechanism to help power projects recover dues in time from state electricity distribution companies to alleviate the sectoral stress to a large extent.

The proposals are being deliberated at the high-level empowered committee headed by the cabinet secretary that is likely to meet next on Friday.

“It has been proposed that the government removes restrictions on coal usage to include shortterm PPAs,” a person in familiar with the development said. “Auction of another 2,500 MW aggregated PPA scheme, this time with attached coal supply, has been proposed.

Work has already begun on drafting a bill discounting mechanism to ensure recovery of timely payments from state power distribution companies directly to banks.” Read More

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