Government to ensure fuel supply agreements for power plants
21 Mar 2012
The government has decided that Coal India Limited (CIL) will sign fuel supply agreements (FSAs) with power plants that have entered into long-term power purchase agreements (PPAs) with distribution companies (Discoms) and have been commissioned or would get commissioned on or before 31 March 2015.
This decision has been taken to make adequate coal availability for the power plants that have been commissioned or are being commissioned. However, the subsidiary companies of CIL have not yet signed any FSA as per this decision, minister of state for coal Pratik Prakashbapu Patil said in a written reply in the Lok Sabha today.
Captive power plants are getting supplies of coal under the applicable fuel supply agreement (FSA), which is different from that of the proposed FSA for power plants having power purchase agreement (PPA) with Discoms, he said.
The applicable FSAs for existing and new captive power plants have trigger levels for penalty for short supply at 60 per cent and 50 per cent of annual contracted quantity, respectively, he said.
While the estimated coal production in the country will be adequate to meet the demand of the FSA holders, he said, in case of any shortfall in fulfilling its commitment under the FSAs from its own production, CIL may arrange for supply of coal through imports or through arrangements for obtaining coal from state/central public sector undertakings (PSUs) who have been allotted coal blocks and have started production of coal but have not commissioned their end use plants.
The 17th Electric Power Survey (EPS) report of the Central Electricity Authority (CEA) projects the likely power demand of 1,392 billion units in 2016-17. If coal based thermal power plants continue to meet 70 per cent of the power requirement of the country, coal based generation would be around 974 billion units, for which requirement of coal would be around 682 million tones, provided specific coal consumption remains at 0.70 kg per unit of electricity, the minister said.
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