Invites EOI from the desired IPP for rationalization of their existing linkages in compliances with the freshly issued directives
Kolkata, August 26: Coal India Limited (CIL) has issued a notice on Tuesday, August 25, regarding the rationalization of linkages for Independent Power Producers (IPPs). This will be a “one-time process of calling for requests from the IPP for linkage rationalization shall be undertaken jointly by CIL, SCCL and CEA in a transparent manner”.
The notice is in reference to the direction issued by the Ministry of Coal in a letter dated 15.05.2018 regarding rationalization of linkages for Independent Power Producers.
Coal linkage rationalization shall be an exercise in which the coal linkage of a Thermal Power Plant (TPP) of an IPPs may be transferred from one Coal Company to another based on the coal availability and future coal production plan of the coal company. The underlying objective for this exercise is to reduce the landed cost of coal due to reduction in transportation cost and cost of coal. Which shall lead to savings and will be reflected in the cost of power generated and these savings shall pass on to buyers of power through a transparent and objective mechanism.
In this regard, as per the Official Memorandum of Ministry of Coal dated 15.05.2018, the cost savings on account of linkage rationalization shall be calculated as per the below mentioned calculation modality as provided by CEA:
| Original Linkage | Rationalized Linkage | |
| Base price of coal (₹/tonne) | Po |
Pr
|
| Gross calorific Value (Kcal/Kg) | GCVo | GCVr |
| Linkage Quantity (tonnes) | Qo |
Qr= (GCVo*Qo)/GCVr
|
| Distance from Transportation (Km) | Do | Dr |
| Total transportation Cost (₹) | To= f(Do,Qo) | Tr= f(Dr,Qr) |
| Cost Saving (₹) | (To-Tr) + (Qo*Po – Qr*Pr)
|
|
The notice stated, “It was also mentioned that the above calculation sheet for transportation of cost savings due to linkage rationalization of IPP, may be taken as base formula for calculating the cost savings due to change in transportation distance and change in GCV if linkage coal and this formula shall be made available in the public domain and the IPP which are ready to pass on this per unit cost savings to the DISCOMs/buyers shall be eligible for applying linkage rationalization requests with the coal companies. A uniform procedure for calculation of the cost savings as per the above formula would be decided by CEA separately.”
As per the methodology, linkage rationalization for 2 IPPs have already been done by Coal India Limited (CIL) for a quantity of 2 MT and CIL has requested to commence the next round of linkage rationalization in the terms of methodology and apprise the final result.
In compliance of the above directives, Expression of Interest (EoI) are invited from the desired Independent Power Plant (IPP) for rationalizing their existing linkages.
The outer date for submission of EOI is 8th September, 2020.
