Easing power plants' fuel woes

A new scheme for ensuring coal for power stations, which lack firm fuel allocations, could hinder competition and private sector participation

On May 17, the Union Cabinet took two important decisions aimed at streamlining coal allocation to the power sector and making it more transparent and objective. How will these decisions play out and will they be able to address the needs of the fast-evolving sector? Our analysis suggests that while they address some near-term issues, they are unlikely to cater to the future needs of the sector.
 
The first decision was to approve the signing of fuel supply agreements (FSAs) by power plants holding letters of assurance (LoAs) and likely to be commissioned by March 31, 2022. This assures