Govt tweaks coal utilisation norms for private power producers amid rising electricity demand

03 May 2022

The Union power ministry said that it has allowed private power generating stations to secure coal supplies for up to three years instead of current norm of one year, a move that comes against the backdrop of rising demand for electricity. The ministry has tweaked the methodology for the use of coal, allocated to states, by Independent Power Producers (IPPs) wherein the timeline for the bidding process has also been reduced to 37 days from current 67 days.
In a statement, the ministry said the measures have been taken for ensuring more efficient utilisation of domestic coal as well as for optimally utilising the railway infrastructure for maximum transportation of coal to the power plants. Larger visibility has been given to the power plants by extending the period of supply of coal from 1 to 3 years, it added. "In line with various measures being taken in view of increasing power demand, Power Ministry has amended the methodology for use of coal (allocated to states) by private power generating stations," the statement said. The ministry also said the latest steps would also enable states to optimally utilise their linkage coal in the plants nearer to the mines as it would be easier to transmit electricity instead of coal transport to far off states.