National miner Coal India Ltd (CIL) has opened the floodgates of coal supply for power generation units by removing any restrictions on the contracted coal quantity. Any power plant that has signed a fuel supply agreement (FSA) with CIL can now procure as much coal as it requires. Earlier, CIL was supplying coal as per the ‘annual contracted quantity’ (ACQ) it signed with a power plant.
“CIL has paved the way for allowing supplies beyond ACQ to thermal power plants of the country, including independent power plants (IPPs). This applies to the Gencos that have signed FSAs embedded with such an enabling clause,” the company said in a statement on Tuesday. It added that in the last week of June, CIL’s board had cleared the decks for allowing supplies beyond ACQ. “This ushers in ease of doing business, simplicity, and avoids duplicity of work,” it said.
Coal would be supplied at the same price as signed in the respective FSA by the power plant, said a CIL executive.
With this, CIL has done away with the earlier provision that allowed coal supplies up to a maximum of 120 per cent of ACQ to power plants and IPPs. The New Coal Distribution Policy in 2007 first laid down the concept of ACQ under which CIL supplied a certain threshold of the coal requirement of a power plant. It was 80-90 per cent then. It was increased to 100 per cent in FY23, and earlier this year, it was raised to 120 per cent, given the surplus coal availability with CIL.
“Now, the simplification would benefit the power plants that prefer to lift higher quantities of coal beyond their stipulated ACQ. The fillip for CIL is that it would boost its supplies at a time when coal demand is showing signs of slackening,” the company said.
In an interview with this paper last month, P M Prasad, chairman and managing director, CIL, had said volume maximisation is one of the tools the company is deploying to boost its revenues. “Volume growth in the sale of coal maximises our revenue because the major cost is fixed and any increase in sales is advantageous,” Prasad had said.
CIL’s pitheads currently have a coal stock of 72 million tonnes (MTs), which is 47 per cent more compared to 49 MTs as of August 12, 2023. The national average coal stock with the power plants stands at 14 days, which is a record high in several years during the monsoon months.
During FY24, CIL supplied 101.6 per cent of the projected coal demand. It registered a growth of 5.4 per cent in coal supply over FY23. Of a total of 153 domestic coal-based power plants in the country, CIL has long-term linkages with 127 plants, totalling 592 MTs, including 50 IPPs.
First Published: Aug 13 2024 | 6:00 PM IST
