Domestic miner Coal India Ltd (CIL) has initiated a fresh round of coal auctions envisaged under the Scheme for Harnessing and Allocating Koyala Transparently in India (SHAKTI) for the power sector.
These auctions, conducted on a quarterly basis, provide short-term linkages valid for a minimum of three months and up to a maximum of one year. Notably, the latest round is the eight tranche of auctions scheduled for the Jan-Mar’22 quarter, offering 4.61 mn t of coal.
However, this is earmarked only for those private power producers which do not have power purchase agreements (PPAs), and provided these players sell the power generated through the coal secured in the linkages on the power exchanges.
Over the seven tranches of auctions that have been concluded, the company had offered a total of 37.52 mn t of coal, of which 6.66 mn t was booked by the successful bidders.
Key takeaways
The latest round of sale will take place in a 5 day-long auction process starting from 21 Jan’22, wherein the floor price is set similar to the notified price, thereby offering coal at a subsidized rate.
In contrast, the floor price in case of regular auctions for the power sector under the special forward scheme is fixed by applying an add-on charge (upper cap) in terms of a percentage over the notified price.
Auction time-line
Quantity in metric tonne (t) | prices in INR/t
Of the total offered volume, Mahanadi Coalfields Ltd’s (MCL’s) allocation is the highest at 2.57 mn t, followed by Southern Coalfields Ltd (SECL) and Central Coalfields Ltd (CCL).
Grades on offer for sale predominately include non-coking coal in the lower calorific value band. Notably, apart from 290,000 tonnes of G8 from Northern Coalfields Ltd (NCL), rest of the offered volume in this term falls in the range of G10-G16.
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