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States can use quota of coal in pvt power plants for 3 years

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NEW DELHI: As rising electricity demand stretches fuel supply lines, the government on Friday said states can use their quota of coal in private power plants for up to three years, instead of one year at present, as this will ease pressure on Railways and boost capacity utilisation of more efficient units.
The longer duration will provide comfort level to states and private power plants for a more cost-effective tolling proposition. States can put their allotted coal to more optimum use at power plants that are near to mines as it is easier to transmit electricity instead of coal to faraway states, the power ministry said in a statement.
The ministry had, at a meeting to review fuel inventories at power stations earlier this month, decided to allow states to use such tolling facility for up to 25 per cent of their allotted coal. Tolling also reduces power production cost of states due to short transportation distance and the fact that the private power plants are usually more efficient than those operated by the state utilities.
The amended methodology for utilisation of coal allotted to states at other units also makes it mandatory for the tolling plant to make available 100% power scheduled by the buying state. Otherwise, the power plant will have to pay 20% of the tariff as compensation to the buyer for the quantum of shortfall below 80% of the capacity scheduled by the state.
Similarly, the revised norms also safeguards the interest of the power plants by doubling the compensation to be paid by the buying states to 20% of the tariff if they schedule less than 80% of the capacity on an average.
In both cases, the compensation is to be paid on a monthly basis for the quantum of shortfall below the 80% threshold.
These are the latest in a series of steps, including asking states to import coal, the ministry has taken in recent times as the country’s power plants are struggling to keep up with rising demand due to low fuel stocks. Fuel inventories at the power plants are at 35% of the normative requirement, which is good for only about 10-11 days.
The daily consumption of coal is more than the actual supply at power plants as the Railways grapple with an increased demand, which is leading to faster drawdown of inventories. The government expects peak demand to touch 210 GW this month and wants all coal-based power plants to have enough fuel inventory to supply about 160 GW during peak hours.




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