Government to offer coal use flexibility to private companies

Government to offer coal use flexibility to private companies

Private companies may be offered the flexibility to use domestic coal to bring down costs, Power Minister Piyush Goyal has said.

“We have proposed to do it for private companies as well in 3-4 months after doing it for states,” Goyal said when asked about timeline for the government to relax norms for using domestic coal by private firms.

“We have mentioned it in the Cabinet proposal that first we will do it for states. Thereafter, we will do it for private companies,” the minister said.

The Modi government had last month had relaxed norms for utilisation of domestic coal by states with an aim to reduce cost of power generation by 40-50 paise per unit. The move, it is estimated, will result in yearly savings of up to Rs 30,000 crore in the next 4-5 years.

The government has allowed all coal linkages to plants of state and central utilities like NTPC to be combined. The state and central utilities are also given freedom to utilise that coal in most efficient and effective manner for reducing the cost of power generation. Under the arrangement, all coal linkages to a central public sector undertaking are treated as one.

This helps these state-run plants to find the most effective way of utilising it so that the modern and new plants run at a higher plant load factor. This reduces cost of power which is ultimately passed on to the consumer.

Leave a Reply

Your email address will not be published.