Coal India Ltd (CIL) has envisaged to sale almost 6 mn t coal for the power producers via auction proposed under the fourth tranche of SHAKTI scheme.
The auction which has started from 11 Dec ’20 will stretch up to 21 Dec ’20, wherein coal from various collieries pertaining to different subsidiaries of CIL is offered for an extended lifting period valid for three months from Jan ’21 to Mar ’21. (Detailed auction schedule can be seen here).
The provision aims to provide coal linkages to the power generators based on the methodology similar to the one highlighted in the policy on linkage auction for non-regulated sector. Consequently, the floor price has been set at the prevailing CIL notified price in order to offer coal at cheaper rates.
Except NECL, all the other coal producing subsidiaries of CIL have offered coal for sale, with highest quantity being recorded from MCL followed by CCL.
Background of SHAKTI scheme:
Introducing a transparent mechanism for providing coal linkages to power sector, the government launched SHAKTI (Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India) in 2017 thus replacing the earlier discretion based system of granting coal linkages.
The scheme has taken into account broad spectrum of power plants that do or do not possess PPA (Power Purchase Agreement).
Accordingly, under the paragraph B(viii)(a) of the policy, coal linkage has been proposed for plants which do not have PPAs, provided that power generated from the coal is sold in Day Ahead Market (DAM) through power exchanges or in short term through a transparent bidding process through Discovery of Efficient Energy Price (DEEP) portal.
Under the provision, three tranches of auction has been successfully concluded, the fourth one also intends to raise coal supplies of these plants and in turn help CIL to reduce its elevated stockpiles.
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