Calcutta, May 28: Power producers who want to ensure their coal supply from Coal India will have to accept a small quantity of imported coal at a higher price.
Coal India chairman S. Narsing Rao today said, “From its own sources, Coal India can supply 60-65 per cent of the coal quantity it has committed through letters of assurance (LoAs) to power producers. We shall have to import the remaining 15 per cent to ensure the trigger level supply of 80 per cent when the LoAs gets converted into fuel supply agreements (FSAs).”
However, he said, Coal India had till now not considered imports. “We need to clarify to customers that if they insist and commit to pay the landed price of imported coal, only then we’ll import,” Rao said.
The new fuel supply agreement, which has now been extended to power firms that are going to be commissioned before March 2015, has a provision which says, “The seller (Coal India) shall have, at its own sole discretion, the option to supply the balance quantity (read, shortfall) of coal through import to be delivered at unload port at cost plus pricing, including service charges of CIL.”
Moreover, if the quantity so offered is not accepted by the purchaser, no penalty shall be applicable on CIL for the shortfall.
“The FSA will be signed only if the power producer has signed the power purchase agreement (PPA),” Rao said.
Coal India had stopped signing FSAs since April 2009. From then till December, at least 49 power producers have signed LoAs and commissioned their plants.
“Of the 49 companies, only 14 have so far signed the PPA and have converted their LoAs into FSAs,” Rao said.
FSA refers to the extent of coal required to produce the amount of power by the generating company through a long-term (20 years) power purchase agreement.
In 2011-12, Coal India supplied 312.10 million tonnes to the power sector against the target of 326 million tonnes.
“In the current financial year, we aim to supply 347 million tonnes, an increase of 11.2 per cent from last year,” Rao said.