India relaxes rules on coal supply to increase power generation capacity
India changed its rules on Wednesday to allow independent power producers to sign long-term contracts to supply coal to the country. The move is part of an effort to increase coal-powered plant capacities.
The government has also removed the requirement for coal power producers to have power purchase agreements in order to sell electricity.
In a press release, the coal ministry stated that these moves would encourage power producers in planning new thermal capacity and assist future capacity addition.
India wants to build more power plants at the mine pitheads to reduce the difficulty of transporting coal from distant places to power plants.
The new policy approved by the Cabinet on Wednesday allows independent power producers, with or without power purchasing agreements, to purchase coal through an auction for up to a maximum of 25 years and a minimum period of 12 months.
India plans to increase its coal-fired power capacity from 222 GW to 80 Gigawatts (GW) by 2031-32 to meet the growing demand for electricity.
Central Electricity Authority statistics show that the country has added 28 GW coal capacity over the last five years.
These coal power increases come as the country aims to add 500 GW or more of clean energy in 2030, compared to 172 GW at present.
India's renewable sector faces several challenges including a lack of demand for tenders and delays in power purchase agreement. Reporting by Sethuraman NR, Editing by MrigankDhaniwala
(source: Reuters)
