NEW DELHI: The coal ministry has recommended Cabinet Committee on Economic Affairs (CCEA) to meet coal demands of 78,000 mw of power projects partly through imports since Coal India will not be able to cater more than 65-75% of supplies from its domestic production. The higher cost of imported coal may be allowed as a pass through in tariff fixation. Early this month, the ministry of power that has been working on coal price pooling mechanism for past few months sought Central Electricity Regulatory Commission's advise for implementation of this recommendation.
To meet its balance obligations for coal supplies, Coal India will supply imported coal to 78,000 mw of power plants on cost plus basis. It includes 60,000 mw of post -2009 power plants, 7,000 mw having letter of assurance and 11,000 mw of projects having tapering linkage. Power project developers will have liberty to import coal directly if they wish to.
According to the note prepared by Coal India for the Cabinet Committee, Coal India will sign fuel supply agreement for domestic coal quantity of 65%, 65%, 67% and 75% of annual contracted quantity for next four years of the 12th Five Year Plan. It also stated that Coal India will continue to supply domestic coal at 90% of the annual contracted quantity for pre-2009 power projects. The Cabinet Committee will consider the same during its next meeting.
After the speculations over the government abandoning coal price pooling exercise following the CCEA meet held on April 22, Power Minister Jyotiraditya Scindia told ET: "The CCEA wishes to consider possible alternatives to deal with competing demand for coal in the wake of the limited availability as per coal production forecast of the coal ministry."