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CEA suggests allotment of coal to thermal plants

It also asks state govts to speed up bids for development of plants, reports Deepak Joshi and M Rajendran.
None | By Deepak Joshi and M Rajendran, New Delhi
PUBLISHED ON OCT 19, 2006 06:31 PM IST

In order to tide over the problem of fuel shortage for power plants, the Central Electricity Authority (CEA) and the Planning Commission have suggested direct allotment of coal blocks to merchant thermal power plants of 500 megawatt (MW) to a maximum of 1,000 MW capacity.


The CEA has also asked all state governments to speed up tariff-based competitive bids for the development of power plants based on coal from captive blocks and to apply to the Coal Ministry for allotment of such blocks.


States need to act urgently "to facilitate the emergence of merchant power plants which would compete in the market for supply of electricity to open access consumers as well as to meet short-term needs of distribution licenses," the CEA has said in a note to the Tamil Nadu Electricity Board.


The Electricity Act mandates the introduction of open access for consumers with loads above 1 MW.


The note says, "Captive coal blocks may be allotted to those developers who give assurance backed by sufficiently strong bank guarantee/bid bond to develop the captive coal mine and the power plant in a time-bound manner."


The CEA has also suggested that for developers of merchant power plants up to 1,000 MW, letters of assurance-based coal linkages be freely given. In order to push coal linkages to ultra mega power projects, the CEA has suggested that independent power producers (IPPs) be allotted coal blocks with internal resource generation up to Rs 30 lakh per MW, a net worth of Rs 50 lakh per MW and an annual turnover of Rs 1.20 crore per MW.


The guidelines for allocation of coal blocks for IPPS and central power producing companies says, "In order to have adequate competition among the merchant power plants, it would be desirable to try and initially allot one coal block each to all serious developers who apply."

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