India likely to allow power plants to swap imported and domestic coal

Date: Dec 24, 2018

Pushing through further rationalisation of coal supply linkages, India’s Coal Ministry is working on permitting thermal power plant operators to swap imported transported to deep into the hinterland with domestic coal being transported to plants along the coast.

The Coal Ministry has set up an inter-Ministerial task force, which would be meeting on Friday to go into the detail of swap of imported and domestic coal, a government official said.

The officials said that at present thermal power plants deep in the interior have to import coal and incur additional transportation costs, while thermal power plants along, or near, the coast source domestic coal and swapping of dry fuel between such plants would reduce fuel costs for both the consuming plants.

Some years ago, few thermal power plants had entered into such swap agreements between themselves and were successful in reducing cost of dry fuel, but officials said that the Ministry was keen to lay down guidelines for such linkage arrangements and avoid risks of disputes between thermal power plants that might arise from possible quality, grade and delivery issues.

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