Lok Sabha Question No. 465 (STARRED), answered on 2017-04-06
Subject: Use of Transferred Coal
Ministry: POWER
Asked by: DHARMENDRA YADAV, Shrirang Appa Barne

## GOVERNMENT OF INDIA MINISTRY OF POWER

LOK SABHA STARRED QUESTION NO.465 TO BE ANSWERED ON 06.04.2017

USE OF TRANSFERRED COAL

†*465.  SHRI DHARMENDRA YADAV: SHRI SHRIRANG APPA BARNE:

Will the Minister of POWER be pleased to state:

(a) whether  the  methodology  for  use  of  transferred  coal  in  independent power producer (IPP) generating stations has been finalized so as to bring in further efficiency in utilization of domestic coal and if so, the details thereof;

(b) whether his Ministry has framed new rules for electricity supply from independent power producers in lieu of dry fuel and if so, the details thereof; and

(c) whether as per the new rules any restriction imposed by the Regional Load Despatch Centre/State Load Despatch Centre on scheduling of power due to breakdown of transmission and grid constraints shall be treated as force majeure without any liability on either side and if so, the facts thereof? A N S W E R

THE MINISTER OF STATE (INDEPENDENT CHARGE) FOR POWER, COAL, NEW & RENEWABLE ENERGY AND MINES

( SHRI  PIYUSH GOYAL )

(a) to (c) : A Statement is laid on the Table of the House.

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STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (c)  OF  STARRED QUESTION  NO.465  TO  BE  ANSWERED  IN  THE  LOK  SABHA  ON  06.04.2017 REGARDING USE OF TRANSFERRED COAL.

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- (a) & (b) : The  proposal  of  the  Ministry  of  Power  was  approved  by  the Cabinet  on  4 th   May,  2016  for  "Flexibility  in  utilization  of  domestic  coal  for reducing the cost of power generation".

Following Five cases have been envisaged for allowing flexibility in utilization of coal under this arrangement:-

- Case-1: Use  of coal  aggregated  with  the  states  in  its  own  State Generating Stations.
- Case-2: Use of coal aggregated with the one state in generating stations of other state's utilities.
- Case-3: Use of coal aggregated with State in Central Generating Stations and vice versa.
- Case-4: Use of coal by any State/Central Generating Company in Private Generating Stations (IPPs).
- Case-5: Use of coal assigned to Central Generating Company in their own plants or any other more efficient plants.

Central Electricity Authority in consultation with the stakeholders  issued  the  methodology  on  8.6.2016  for  transfer  of  coal amongst Generating Stations of State/Central Gencos.

Under  case  4  of  "Flexibility  in  utilization  of  domestic  coal  for reducing  the  cost  of  power  generation",  the  methodology  for  use  of  coal transferred  by  a  State  to  Independent  Power  Producer  (IPP)  generating stations has been issued by Ministry of Power, Govt. of India on 20.02.2017.

As per the methodology, the State can divert their coal and take equivalent power from IPP generating stations selected from the competing IPPs through an e-bidding process.  The guiding principle of the methodology is that the landed cost of power from IPP generating station at the State's periphery should be lower than the variable cost of generation of the State generating station whose power is to be replaced by generation from IPP. The  landed  cost  of  power  is  inclusive  of  the  transmission  charges  and transmission  losses.    The  source  of  coal,  quantity  of  coal,  quality  of  coal, quantum of power, period for which power is required, delivery point for the receipt of power, has to be indicated upfront by the State.

- (c) : As  per  the  methodology,  any  restriction  imposed  by  Regional Load  Despatch  Centre  (RLDC)  /State  Load  Despatch  Centre  (SLDC)  in scheduling of power due to breakdown of transmission/grid constraint is to be  treated  as  force  majeure  without  any  liability  on  either  side  and  the contracted  power  is  to  be  treated  as  deemed  reduced  for  the  period  of transmission constraint.

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