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Policy soon on power plants swapping coal linkages

Policy soon on power plants swapping coal linkages
Aiming to clear bottlenecks in the domestic coal supply, Power and Coal Minister Piyush Goyal on Wednesday said the government is working on a policy that will allow electricity generating firms to swap fuel linkages.

Talking to mediapersons on the sideline of on MindMine Summit, Goyal said: “We are looking at soon coming out with a policy where state generation firms, central PSUs and companies in the private sector, all will be given the approval to soon to swap coal inter se their various plants.” The government will assess whether it is feasible to run plants across the country on low PLF (plant load factor or efficiency), or to look at improving the efficiency of better performing, more efficient modern plants, he said.

The proposed regulatory framework is to run thermal plants with more efficiency, reduce pollution and freight. Goyal said the exercise will benefit the pithead projects more. “...particularly those at the pithead where it is easier to transmit coal and reduce the PLF of the inefficient plants.” However, the minister is expected to face challenges for the policy to go through. “There is a challenge that I am trying to sort out which is that different plants have contracted sales to different states...when we increase production in one plant and bring it down in another, we have to ensure that the transmission capabilities to disseminate that power,” Goyal said.

“We are working on that but I am fairly confident we will resolve that issue,” he added. The minister said that if two different companies want to swap coal supplies they will have to seek permission so that we can ensure that there is no misuse and no windfall gains or profiteering is involved. This proposed policy is likely to be different from the coal swapping agreement between NTPC and the Gujarat government. Last year, NTPC and Gujarat government run Gujarat State Electricity Corporation Ltd (GSECL) inked a memorandum of understanding (MoU) to swap one million tonnes of coal. The arrangement is likely to help both the companies save Rs 378 crore per one million tonne. 
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