After creating coal surpluses in the country, the Centre has now set its focus towards improving the quality of coal to encourage domestic power producers to buy the locally available coal then go in for coal imports.
With increased availability of coal in the country, the government has been able to save Rs 24,000 crore on imports of coal last year and has targeted to save Rs 40,000 crore in the current fiscal.
State owned Coal India Ltd (CIL), which accounts for about 80% of the domestic coal production, supplies a chunk of the coal it produces to power utilities. However, despite coal surpluses with CIL, power companies have been citing quality of domestic coal being inferior to that of imported coal, said an official.
“This (quality of coal) was an area of concern which after deliberations at the highest level of the minister of power, coal and RE, Piyush Goyal, it was decided to monitor the quality of coal going to thermal power plants and other industries,” he added.
The Centre accordingly decided to allow Central Institute of Mining and Fuel Research (CIMFR) to carry out sampling and analysis at unloading end.
Recently, Coal Ministry has nominated CSIR-CIMFR to take up the job of coal quality monitoring at national level for the entire power sector to ascertain the coal quality.
A tripartite MoU is also being signed among CSIR-CIMFR, NTPC and Coal India on July 28 in the presence of Union Minister for Science and Technology & Earth Science Harsh Vardhan and Power Minister Piyush Goyal.
At a recent conference in Goa, Secretary for Coal Anil Swarup said that from a shortage situation sometime back, the ministry is now saddled with surplus stock and there are not many takers for 550 million tonnes of coal stock. He appealed to generating companies and states to stop importing coal.
He said Coal India Ltd has set up the processes for auction of coal to public and private entities and a dispute resolution mechanism has also been set up to look into disputes between States.
On his part, power and coal minister Piyush Goyal in response to the situation recently said that “we certainly would like to give more certainty to the availability of coal for which we are working on the contours of a final policy.” This, he said, will largely help states which want to bid out fresh power purchase agreements (PPA). “So we will give out coal to the state and they can offer that coal and allow power plants to bid for supplying electricity and whoever supplies it as the lowest cost can then become eligible to get that linkage,” Goyal said in a recent interview to a TV Channel.
“So states will be given the linkage. Further states will be given coal linkages which they can use for their own plants or through a process they can give to other plants in their states and lastly there are many companies which have power purchase agreements but don’t have an assured supply of coal. We are trying to work on a framework where there will be an auction even of coal linkages to such companies and they can bid transparently and see if they can re-assure their coal supply,” the minister has added.