In the midst of a national coronavirus shutdown, state-owned Coal India extended the time limit for expression of interest (EoI) from power generation companies (gencos) to rationalize coal ties.
Linkage rationalization refers to the transfer from the distant mine to the nearest coal supply source in the power plant.
“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 Ltd (CIL) said in a letter to power gencos.
Earlier, CIL had invited expressions of interest from the requested state / central genes to rationalize their current ties.
“Based on the information provided by the coal companies regarding the availability of coal and information from power gencos through EoI, 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.
Previously, the coal ministry wrote to CIL stating that, according to the methodology, the relation rationalization of two independent power producers ( IPPs) was carried out by the PSU for a quantity of two million tonnes.
It asked the PSU to begin the next round of link rationalization and to notify the Center of the final outcome of the link rationalization by 30 June.
The underlying objective behind this exercise is to reduce the cost of landed coal by reducing the cost of transport and the cost of coal.
The reduced landed price of coal leads to savings that must be reflected in the cost of electricity generated. Such savings must be passed on to the buyers of power through a simple and objective process.
This is a voluntary operation on the part of thermal power stations.
The aim of the exercise is to reduce the distance over which the coal is transported, thereby improving the rail network for the benefit of other sectors.
Linkage rationalization shall be considered only in the case of IPPs having links via an allotment path.
IPPs that have established relations through the auction process are not qualify for rationalization under
This is the system.
Swapping of coal-fired connections by auctions or imports is also not allowed under this exercise.
Coal India, which accounts for more than 80 per cent of the domestic coal producer, is a major supplier of dry fuel to the power sector.
