The Coal Ministry is expected to look for cabinet’s approval to allot coal linkages in the power sector through an auction process.
The Coal and Power Minister, Piyush Goyal announced that the auction terms and the plans are almost finalized; they will very soon take it to the cabinet. He further added that they shall go for an inter-ministerial consultation to foresee better decisions and complete the process in a proper manner.
According to the country’s statistics, there is enough coal in the country for all the sectors. The honorable minister said that the government does not need to rush to held auctions for coal linking to the power sector.
Piyush Goyal also said that that they are trying to create a strong and well-balanced mechanism to ensure that there is complete transparency in the auction process, and all the sectors involved in this don’t feel cynical.
Coal is widely used to generate power in India. The government came up with a coal linking policy through which coal can be allocated to different sectors using large-scale thermal power plants. This can be done through the active participation of the government assigned for coal states.
To use coal in state or central owned plants, it can be decided through a set of figures and criteria that is – transportation cost for coal, efficiency of a plant, overall cost and distribution plus transmission costs.
India, being a populated country, has a capacity of generating power for almost 145,000 MW. Among this, power source that is used throughout the country is close to 737 million tons. So, around 30,000 MW is still under shadow and waiting desperately for its allocation.
Before any of this came into light, the cabinet committee on behalf of economic affairs deliberately approved allocating coal linkages for the non-regulated sectors in the country through a streamlined auction process.
Coal India Limited has decided to share around 23.25 MTPA (million tons per annum) in the first cycle of auction.