Standard Post with Image

Coal supply for short term may revive stressed power plants

Government has been putting extraneous efforts to ease stressed power plants, around 34 stressed power plants are likely to become stalled due to unsecured coal supplies. Following this government launched Shakti Scheme in May 2017 and two rounds of coal auctions have already been conducted, these auctions helped to ease stress of many power plants. Following this Government has further relaxed coal supply to power plants holding under short-term power purchase agreements, so far, coal was allocated for long-term and medium-term PPA holders. Auction under short term is likely to begin from month of Feb 2020 for non-captive power plants which do not have power purchase agreements (PPAs) for more than half their capacity. The power generated through use of this coal must be sold on the power exchanges or short-term market through bidding on the power ministry’s DEEP portal. Coal India and Singareni Collieries Company will assign mines for coal supply for these auctions.

The auctions are planned to happen every quarter to match dynamic requirements and demand variations in short-term and day-ahead markets. Annual calendar is also released for the months in which auctions shall be carried out.               

With this, stressed power stations may be revived and this would also enable deepening of the power market as the electricity would be traded through the power exchange.