CCEA Gives Approval to New Coal Linkage Policy (Download PDF)

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The CCEA has approved a new coal linkage policy to ensure adequate supply of the fuel to power plants through reverse auction. The new policy will help in ensuring fuel supplies to the power plants in an organised manner.

In This Image Shows CCEA

In This Image Shows CCEA

In This Image Shows CCEA

Highlights:

  • The CCEA today approved a policy for providing linkages to power plants.
  • The government’s initiatives as well as international market conditions have helped bring down price of the dry fuel and boosted domestic production.
  • Mechanism is required for providing coal linkages to power plants at competitive rates.
  • The CCEA has approved the signing of Fuel Supply Agreement with the Letter of Assurance holders.
  • PPA is a contract between two parties:

    • One which generates electricity
    • One which is looking to purchase it
  • Coal linkages will be granted on auction basis for Independent Power producers with PPA based on domestic coal.
  • Linkages, for full normative quantity, shall be granted for setting up Ultra Mega Power Projects.
  • The coal supply to the TPPs has been made as per the provisions of the New Coal Distribution Policy.
  • Coal India (CIL) issued LoA for approximately 1, 08, 000 MW capacity and no new LoAs were issued thereafter due to the prevailing scarcity scenario

About of Coal Linkage Policy

  • Coal linkage policy is a policy designated by the union government for the allocation of coal among thermal power plants.
  • The new coal linkage policy for power plants will help producers ensure fuel supplies in an organised manner.
  • Inadequate availability of domestic coal coupled with high price for imported coal requires.
  • The government to allocate the available coal rationally among the power plants.
  • The pricing of coal is an another important issue.
  • This is especially necessary as the coal-producing firms are public sector companies.

- Published/Last Modified on: May 22, 2017

Policy/Governance

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