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Government’s initiatives: Eases doing of business in Indian coal sector

Government has allowed IPP to use contracted fuel supply from CIL for other plants by the same group. If a power company has separate fuel supply agreement for each plant, it can transfer coal from one plant to another which has commitments of generating power for distribution under long-term power purchase agreements with power distribution companies.

This flexibility of usage of coal to other plants is expected to reduce cost of generation, as it would reduce transportation cost and would also allow plants to pile up coal during peak season. Plants are also expected to run most efficiently, to use the coal at the nearest location to the source or the most efficient plant. This would lead to efficiencies and benefits to consumers by reduction in their power bills.