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Govt allows states flexibility in utilisation of coal linkage for reducing cost of power

The government has allowed state governments and UTs flexibility in utilisation of domestic coal amongst power generating stations to reduce the cost of power generation

Govt allows states flexibility in utilisation of coal linkage for reducing cost of power
Govt allows states flexibility in utilisation of coal linkage for reducing cost of power
  • States can use their linkage domestic coal, under flexible utilisation of coal, in Case-2 Scenario-4 power plants

  • At present consumers of Punjab, Haryana and Uttar Pradesh will benefit from this, said the ministry

New Delhi: The government has allowed state governments and Union Territories (UTs) flexibility in utilisation of domestic coal amongst power generating stations to reduce the cost of power generation. “States can use their linkage domestic coal, under flexible utilisation of coal, in Case-2 Scenario-4 power plants leading to reduction in the cost of power. Entire savings shall be passed on to the electricity consumers,” said the Ministry of Power in an official statement released on Thursday.

The Case-2, Scenario-4 power plants are those power plants which have been bid based on the Net Heat Rate and the power generated from such power plants is supplied to the state itself. These power plants have been established through a bidding process under the guidelines issued by the Ministry of Power under Section 63 of the Electricity Act 2003.

Flexible utilisation of coal expected to save Rs 300 cr/per annum in UP alone

At present consumers of Punjab, Haryana and Uttar Pradesh will benefit from this, said the ministry. The expected savings in Punjab alone is going to be around Rs 300 crore per annum, it added. “This will also help in reduction in import of coal and will give a push to the Aatmanirbhar Bharat initiative. It will also reduce carbon emission as coal will be used in more efficient power plants with lower station heat rate,” said the statement.

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‘Coal linkages should be transferred to cost-efficient plants’

Under the flexibility in utilisation of domestic coal, states can use their aggregate linkage coal, ie Aggregated Annual Contract Quantity (AACQ), in the power plants which have been established through competitive bidding under Case-2, Scenario-4. While transferring the linkage coal by the state, it may be ensured that these plants are more cost efficient vis-à-vis the state-owned plants leading to savings in the cost of power purchase. The entire savings due to the use of such linkage domestic coal of the state will automatically be passed to Discoms and ultimately to the consumers. These power plants will utilise the transferred coal only for generation of electricity for supply to the state.

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