Millennium Post

CIL customers support withdrawal of incentive policy

Coal India has received encouraging response from consumers in lifting coal beyond trigger levels after it withdrew performance incentive riders on supply of coal. 

“The response is good from our customers and we find coal is lifted beyond the trigger level of 90 per cent since the performance incentive Coal India was supposed to be charged for supply beyond certain levels,” Coal India director marketing S N Prasad said.

High grade coal of Eastern Coalfield (Ranigunj) and South Eastern Coalfields has benefitted from this 
development since the incentive was withdrawn in February. NTPC, WBPDCL, DVC and consumers of states like Madhya Pradesh, Rajasthan and others including non-power consumers are taking advantage of the relaxation, CIL officials said.

Prasad, however, did not quantify the rise but said the step has evoked good response in pushing high grade coal sale which is priced at around Rs 3,500 a tonne against low grade coals selling at even Rs 700 a tonne. High grade coal accounts for 8 per cent of Coal India’s total production (G-I to G-5) of coal which is around 43 million tonnes.

Speaking on special forward e-auction of coal, Prasad said out of 3.5 million tonnes (mt) of coal was put on offer in April 3.3 mt was booked and now CIL was considering higher allocation from this channel. The reserve price of coal sold to power and non-power through this channel is 10 per cent higher than the notified price. Earlier, the Union Cabinet has approved a proposal to relax norms for utilisation of domestic coal aimed at bringing down cost of power generation. “The Union Cabinet has approved a proposal to provide flexibility in utilisation of domestic coal for reducing the cost of power generation at its meeting held today,” Power Minister Piyush Goyal told reporters after the Cabinet meeting here. The move, Goyal said, will help reduce cost of power generation by 40-50 paise per unit. He expects that this will lead to savings of Rs 25,000 crore per annum in 4-5 years. 

April SCCL’s coal output rises 3%
State-run coal miner Singareni Collieries Company's (SCCL) coal output increased by 2.7 per cent to 4.44 million tonnes (mt) in April. The output stood at 4.32 mt in the same month last year.

However, SCCL has missed the April output target of 4.94 mt, according to official data. The coal dispatch was flat at 4.60 mt in April this year as compared with the same month a year ago, the data said. In 2015-16, SCCL produced 60.38 mt of coal and dispatched 58.68 mt to various categories of consumers. The company has set a production target of 66.06 mt for the ongoing fiscal.

The government is eyeing 1.5 billion tonnes of coal production by 2020. SCCL operates 30 underground mines and 16 opencast mines to meet the linkage requirements of major power (66 per cent), cement (13.5 per cent), captive power (6.6 per cent), sponge iron (3.1 per cent) and other customers (10.8 per cent). SCCL mainly supplies coal to four major power utilities including NTPC Ramagundam, T-Genco power utilities of T S, Karnataka Power Corporation and Parli power station of Mahagenco.

Besides, SCCL supplies coal to 57 cement units, 32 captive power plants and 53 sponge iron units through fuel supply agreements (FSA). 

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