Indian power utilities, including those owned by Adani, Tata Power, Jindal Power and others, with a combined generation capacity of 14,700 MW have sought coal linkages without any usage restriction.
Sources aware of the matter informed that several power plants have raised the issue in order to efficiently run their operations. The move would enable the commissioned power projects to sell coal in the short term and day-ahead market to meet a part of their debt service liability.
It is pertaining to note that majority of coal produced in the country is chiefly utilized by the power sector. However, amid its scarcity in domestic market and to safeguard utilities from expensive imports, the government intervention is necessitated while coal is allocated to various sectors.
Consequently, the Coal ministry allocates coal linkages under certain conditions to power plants, in order to meet their fuel demands. However, the allotted coal is only meant for captive usage and not permitted for sale.
Power utilities seeking relieve in this regard includes Adani’s Raikheda TPP with a capacity of 1370 MW. Apparently, the project was acquired by Adani few months back and is in need of coal linkages. Similarly, Jindal Power with a capacity of 1000 MW also requires the entire capacity to have coal linkages.
While, Prayagraj Power Generation Company Ltd (PPGCL), with a capacity of 1980 MW, has coal linkages for its existing 1740 MW power unit and requires additional linkage for new projects.
Meanwhile, the power sector association had also requested the ministry to allow projects to surrender their coal linkage subject to the condition that their bank guarantees are returned. Notably, some power projects have already procured coal linkage, but have not been commissioned yet.
It was stated that these utilities were holding on to the coal linkages due to apprehension of forfeiture of bank guarantees. Subsequently, it was proposed that such projects should be allowed to surrender their coal linkages so that the pertaining coal supplies could be utilized in some other operational power units at times of coal scarcity.
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