Coal India to auction linkages to power sector 8 times a year & once to NRS

New Delhi: State-run Coal India Ltd (CIL) will auction coal linkages for Non-Regulated Sectors (NRS) in July every year, while auctions under SHAKTI B (viii a) will be held six times a year and under SHAKTI B (iii), twice a year. Coal India released its tentative calendar for auction of coal linkages for the NRS sector and the power sector on October 25. “These auction calendars provide the tentative time schedule during which the linkage auctions under these three categories are to be conducted by CIL during a year. The auction calendar will enable the coal consumers to plan for sourcing their coal requirement under these linkage auction windows through a responsible, accountable, fair, and transparent process of auctions,” said the Ministry of Coal while commenting on the release of the calendar by CIL.

CIL to auction coal linkages to NRS sectors once every year

CIL said that coal linkage auction for the NRS sectors will take place on an annual basis in July every year. Each round of auction is expected to be completed within nine months from the date of commencement of the sale of linkages. The list of sub-sectors under the NRS linkage auction includes sponge iron, cement, captive power plant and steel (coking).

SHAKTI B (viii a) linkage auction for power sector to take place six times a year

Under SHAKTI B (viii a), coal linkages will be auctioned a total of six times in a year and will be categorised into two types. One set of auctions will be held once in every three months and there will be four tranches in a year — May 15, August 15, November 15 and February 15 of every fiscal year. The tentative completion time for each tranche is two months. The second set of auctions will take place once in six months in two tranches a year — April and October of every fiscal year. The completion time for this type of auction will also be two months.

SHAKTI B (viii a) is the window for power plants having untied capacity to bid for coal, to generate power using this coal and sell it in the exchange under Day Ahead Market (DAM) or the DEEP portal for short-term Power Purchase Agreement (PPA).

PSU Watch is now on Whatsapp Channels. Click here to join.

SHAKTI B (iii) coal linkage auction to take place twice a year

According to Coal India’s linkage auction calendar, coal linkage auction under SHAKTI B (iii) will take place once in six months and in two tranches a year — April/May and October/November of every fiscal year. Each tranche is to be completed in two months.

Under this window, future coal linkages are granted on auction basis to power producers, Independent Power Producers (IPPs) that do not have PPAs and are either commissioned or are going to be commissioned. Coal drawal is permitted only against valid long-term and medium-term PPA with discoms or state designated agencies (SDAs).

SHAKTI policy

The supply of coal to thermal power plants, non-regulated sector (NRS) and State Nominated Agency was earlier governed by New Coal Distribution Policy, 2007 (NCDP), the coal ministry said in a statement.

Thereafter, the provisions of coal linkages of the NCDP for the power sector and the non-regulated sector have been replaced by the new mechanisms of SHAKTI (Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India) policy in 2017 and the auction of coal linkages for NRS under the policy guidelines for auction of coal linkages of non-regulated sector -2016, respectively, it said.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)