Give no linkages to captive plants beyond March 15: PowerMin to IMG

A capacity addition of approx 13,000 MW of captive power is likely during the 12th Five Year Plan.

The Power ministry has told an inter-ministerial group that given the paucity of coal,allocation of fuel linkages should be restricted to captive power plants that will be commissioned by March 2015 and not beyond that.

A capacity addition of approximately 13,000 MW of captive power is likely during the 12th Five Year Plan (April 2012 to March 2017). An IMG set up under the chairmanship of Planning Commission member BK Chaturvedi is currently deliberating on identifying CPPs which need fuel. The power ministry wants coal should be supplied for captive power plants (CPPs),but is also worried that it should not be at the cost of independent thermal power plants.

The plan panels Working Group for the current Plan has projected an overall requirement of 842 MT and expects Coal India to produce 653 MT. The government has set a production target of 482 MT for 2013-14 leaving a supply deficit of over 150 MT. Considering the huge shortage,the power ministry told the IMG in a letter on November 18 that instead of considering allocation of linkages to the upcoming CPPs,it should accord priority to such plants either commissioned or to be made operational by March 2015.

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Beyond the cut off period,there should not be any consideration for linkage to CPPs,which should be notified as a policy to all concerned, the ministry pointed out. The CEA should finalised a list of captive plants to be operational by March 2015 after conducting a physical survey. This should be confined to the plants which have already submitted their applications for linkages to the CEA,it proposed. It is learnt that the cut off period may leave around 5,000 MW capacity without any linkage.

For CPPs beyond March 2015,the power ministry has prescribed that while they need not be given linkages,the government can consider supplying them power through Open Access by removing hurdles like imposition of surcharge by distribution companies. It,however,cautioned that CPPs cannot be accorded priority of merchant power plants as per the existing linkage allocation policy.

Instead,the IMG can also consider diverting coal from the e-auction conducted by Coal India to these CPPs.

In turn,Coal India should be incentivised to produce beyond the target by allowing it sell the surplus produce through e-auction during the remaining years of the 12th Plan period.