Power Producers to Source Coal through E-auction from Now Onwards

With the summer season setting in India, consumption of power has risen and will rise further.

At the same time, power generation in the country is expected to get better due to the recent fuel security initiative by the Government of India (GoI).

The GoI has recently done away with the Memorandum of Understanding (MoU) route of supplying coal to power plants, and instead introduced the Forward E-auction route, aimed at supplying coal on a sustained basis.

According to the recent directive, the power plants (the 4,660 MW category, similar plants and plants having erstwhile tapering linkage) will from now onwards have to source coal through special forward e-auctions, to be conducted exclusively for the power sector by the state-run coal major, Coal India Limited (CIL).

The first phase of special e-auction of coal will be conducted during 27-28 Apr’16 for both power producers as well as captive power producers (CPP) .

E-auctions will enable supplying adequate quantities of coal to power producers on a regular basis to provide better fuel security, the underlying rationale behind shifting from the MoU route.

In the meantime, the expiry of the erstwhile MoUs has been extended from 31Mar’16-30Jun’16 to facilitate power producers smooth transition to the new system of fuel procurement.