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Web Exclusive | April 2013

Govt asks CIL to sign supply pacts with power firms

The Union Coal Ministry has asked Coal India (CIL) to sign fuel supply pacts with the power generation companies, including NTPC, before finalising power purchase agreements with them. The Coal Ministry has directed CIL to sign Fuel Supply Agreement (FSA) with power companies, including NTPC, without waiting for PPAs (power purchase agreements), sources said.

The Prime Minister’s Office had, in December, directed power producers to sign FSAs with Coal India in a month’s time. So far, 60 power companies have signed FSAs while many have not signed citing varied reasons. India’s largest power producer NTPC has refused to sign FSA, saying CIL was supplying poor quality coal.

NTPC Chairman and Managing Director Arup Roy Choudhury had said it had agreed on almost all terms and conditions of the FSA and is ready to sign the agreements provided CIL promised to give a minimum calorific value coal.

NTPC's power plants need coal of minimum 3,100 kilocalories, but CIL at times had supplied coal with average heat generating capacity of about 2,100 kilocalories, according to the power company. NTPC buys close to 140 million tonne of coal to fire its thermal power plants. The company has not signed FSAs for 4,500 mw power generation capacity.

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