The power ministry today informed that power companies facing coal crunch will be allowed to sign Fuel Supply Agreements (FSAs) with state-owned miner Coal India Ltd (CIL) even in the absence of legally binding Power Purchase Agreements (PPAs) with distribution companies.
Power generators have been at loggerheads with the miner over the issue of supply pacts. A presidential directive issued to CIL earlier this year had put PPAs as a condition for supply assurance to companies by CIL.
“FSAs will still be signed even if there is no PPA in place. But actual coal supply would not begin until PPAs are not signed by a power company,” power secretary P Uma Shankar said while explaining how the FSA issue has been resolved with CIL.
Power minister Verappa Moily said that his ministry is in touch with its coal counterpart and all the contentious issues regarding signing of FSAs have been resolved. He was speaking at the Economic Editors’ Conference.
Power companies have PPAs in place for 28,000 Mw capacity. These plants are yet to sign FSAs with CIL. Around 2,000 Mw capacity projects are yet to sign PPAs with discoms. Overall, FSAs are to be signed with power projects of 60,000 Mw capacity, according to the power ministry.
Moily also said that the Planning Commission has approved budgetary support for power ministry’s flagship Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) scheme in the 12th Plan. The estimated requirement of budget support is Rs 49,730 crore.
The government plans to add 18,000 Mw of fresh power generation capacity this year, Moily said. This would be part of the efforts to set up a total of 80,000 Mw capacity in the current Plan period ending March 2017.