Power companies have sought intervention from the power ministry to ensure that coal supply is maintained to power plants through the memorandum of understanding (MoU) route until fuel supply agreements (FSAs) are signed.
This comes after the Central Coalfields Ltd (CCL), a Coal India Ltd subsidiary, recently issued a circular to caution its customers that the MoU coal supply could be discontinued from June. Private power companies have warned that about 8,500 mw capacity could get stranded, if the CCL does not withdraw the circular.
“We were assured by the power ministry and the central electricity authority that projects commissioned till March 2012 would also be signed in due course and in the meanwhile, the coal supply to these plants would continue on MoU basis,” Ashok Khurana, director general, association of power producers (APP), has written to Union power secretary P Uma Shankar, recently. APP is a body of private power project developers.
“This circular if not immediately withdrawn would ground the entire coal based capacity of 8,500 mw commissioned after January 2011, adding to the existing power deficit and consumer woes,” cautioned the letter.
CIL was directed by the government to sign FSAs by March 2012 with power projects commissioned till the end of December 31, 2011 and sign these agreement for projects getting commissioned till March end 2015 by the end of the calendar year. As there is lack of clarity over projects that are to be commissioned over next three years, there is also confusion over the timing for signing FSAs.