Coal India Auctions 27.18 Million Tons of Coal to Power Producers | CORPORATE ETHOS

Coal India Auctions 27.18 Million Tons of Coal to Power Producers

By: | December 21, 2017
Coking Coal Consumption to grow on increased demand in India

Dec 21: Coal India Ltd (BSE: 533278, NSE: COALINDIA) have successfully auctioned 27.18 mn tonnes of annual coal linkages to 10 Independent Power Producers (IPPs) who were bidders giving a major boost to 24 x 7 Affordable ‘Power for All’ Vision of the India Government.

The decks have been cleared for the fuel supply agreements (FSA) that are expected to generate over 47 billion units per annum from the coal linkage,and an estimated savings in tariff of approx Rs. 125cr per annum for period upto 25 years.

The introduction of SHAKTI (Scheme for Harnessing and Allocating Coal Transparently in India)  policy by Government replaced the earlier discretion based system of granting coal linkages. This transformation has helped in achieving accountability in allocation of coal. It has ensured access to coal for several stressed plants thereby also helping the banking sector and overall economy. It will also help in affordable power through transparent bidding on the basis of discount on tariffs.

Under the new policy guidelines for allocation of coal linkages to various segments of power sector issued by Ministry of Coal, CIL/SCCL are to grant coal linkages on notified price on auction basis for IPPs having already concluded domestic coal based PPAs. The bidding parameter will be levelised discount on existing tariff that the IPP is willing to provide. The likely benefit arising out of the weighted average discount on tariff as quoted by the bidders for 2.72 paise/kWh will be around Rs. 127 Crores per annum.