Coal Companies Empowered To Supply Coal Beyond PPA: Coal Minister

In a question asked in Rajya Sabha on March 24 regarding the removal of restrictions on coal purchases by power plants, Minister for Coal and Mines Mr G Kishan Reddy said that supply of has been governed by the Shakti Policy. The were earlier governed by New Coal Distribution Policy, 2007 (NCDP).

The question was asked by Mr M. Mohamed Abdulla of DMK.

Explaining the change, Mr Reddy said that the government decided in 2022 that the coal required to meet the full Power Purchase Agreement (PPA) requirement of the existing power plants would be made available to them by the coal companies irrespective of the trigger and Annual Contracted Quantity (ACQ). This enabled power plants to receive coal as per their requirements. In addition, coal is also sold by the coal companies under the Single Window e-auctions.

To another sub-question by Mr Abdulla regarding the steps taken by the Central Government to ensure adequate coal availability for all sectors, Mr Reddy said the government had taken several steps to ensure adequate coal availability. These included measures such as regular reviews by Ministry of Coal to expedite development of coal blocks, enactment of Mines and Minerals (Development and Regulation) Amendment Act, 2021 (MMDR Act) to enable captive mine owners to sell up to 50% of their annual mineral production in open market, a single window clearance portal for the coal sector to speed up operationalization of coal mines, a project monitoring unit for assisting coal block allottees in obtaining various approvals and clearances for early operationalization of coal mines, auctioning of coal mines on revenue sharing basis, and liberalizing the term and conditions of commercial coal mining, with no restriction on utilization of coal. The last change, he pointed out, helped in getting more companies to participate in the bidding process, as it reduced the total upfront costs for companies.