New Delhi: Coal India has given power generating companies an extension in the deadline for the submission of EoIs (Expression of Interest) for coal linkage rationalisation. The term linkage rationalisation refers to the transfer of the source of coal supply to a power plant to a coal mine that is nearer to it.
"Due to the extension of the period of COVID-19 linked lockdown, and on receipt of the request of the power plants experiencing difficulties in collection of the data/details related to the rationalisation of linkages, the last date of submission of the EoI…is extended from April 23 to May 10," Coal India said in a letter to power gencos.
Coal India had earlier invited EoIs from state and Central gencos for proposing rationalisation of their existing linkages. "Based on the information provided by the coal companies regarding the availability of coal and information from power gencos through EoI, the feasibility of rationalisation of linkages shall be examined and a proposed matrix in this regard would be placed in the public domain for seven days to seek comments from the stakeholders which will be then finalised after due approval," the PSU had said.
The point of going for coal linkage rationalisation — transfer of the fuel linkage of a thermal power plant of a power producer from one coal company to another based on the fuel availability and future coal production plan of the coal company — is to cut cost. It reduces the landed cost of coal due to a reduction in transportation cost and cost of coal.
The reduced landed price of coal leads to savings, which has to be reflected in the cost of power generated. These savings then have to be passed on to the buyers of power through a transparent and objective mechanism.