Lok Sabha Question No. 2298 (UNSTARRED), answered on 2016-03-10
Subject: Coal Linkage Policy
Ministry: COAL
Asked by: A. ARUNMOZHITHEVAN

## GOVERNMENT OF INDIA MINISTRY OF COAL LOK SABHA

## UNSTARRED QUESTION NO.2298 TO BE ANSWERED ON 10.03.2016

'Coal Linkage Policy'

## 2298. SHRI A.ARUNMOZHITHEVAN:

Will the Minister of COAL be pleased to state:

- (a) whether the Government proposes to come out with a coal linkage policy to ensure supply of fossil fuel and a new tariffpolicy to boost regulatory mechanism for discoms and attracting investments;
- (b) if so, the details thereof;
- (c) whether the Government would go ahead with one billion tonnes of coal production target amid raging concernsabout rising pollution level; and
- (d) if so, the details thereof?

## A  N  S  W  E  R

## MINISTER OF STATE (I/C) IN THE MINISTRY OF COAL, POWER AND NEW & RENEWABLE ENERGY

## ( SHRI PIYUSH GOYAL )

(a)&(b): There is already a policy of providing coal linkages to the intending consumers under  which,  based  on  the  recommendations  of  Standing  Linkage  Committee  (Long Term) of the Ministry of Coal, the coal companies issue Letters of Assurance (LoA) for supply of fossil fuel i.e. coal, subject to certain conditions. Upon fulfillment of conditions stipulated in theLoA, the Fuel Supply Agreement for supply of coal is signed between the applicant company and the coal subsidiary.

As per the information received from the Ministry of Power regarding Tariff Policy, the Union Cabinet on 20 th January, 2016, has approved the proposal for amendments in Tariff Policy. The revised Tariff Policy has been notified in the official Gazette on 28th January, 2016. The objectives of this revised policy are to:

- I. Ensure availability of electricity to consumers at reasonable and competitive rates;
- II.  Ensure financial viability of the sector and attract investments;
- III.  Promote  transparency,  consistency  and  predictability  in  regulatory  approaches across jurisdictions and minimize perceptions of regulatory risks;
- IV. Promote competition, efficiency in operations and improvement in quality of supply;
- V. Promote generation of electricity from Renewable sources;
- VI. Promote Hydroelectric Power generation including Pumped Storage Projects (PSP) to  provide  adequate  peaking  reserves,  reliable  grid  operation  and  integration  of variable renewable energy sources;
- VII. Evolve a dynamic and robust electricity infrastructure for better consumer services;
- VIII. Facilitate supply of adequate and uninterrupted power to all categories of consumers;
- IX. Ensure creation of adequate capacity including reserves in generation, transmission and distribution in advance, for reliability of supply of electricity to consumers.

The amendments in the policy were designed to benefit power consumers and suppliers in multiple ways, viz., by ensuring availability of electricity to consumers at reasonable and competitive rates, ensuring financial viability of the sector and attracting investments  and  promoting  transparency,  consistency  and  predictability  in  regulatory approaches  across  jurisdictions.  It  is  also  expected  to  further  facilitate  competition, efficiency in operations and improvement in quality of supply of electricity and  to spur renewable  power  for  a  cleaner  environment  and  protect  India's  energy  security.  It  is designed to boost the power sector and make its growth more sustainable.

(c)&(d): A  roadmap  has  been  prepared  by  Coal  India  Limited  (CIL)  to  enhance production of coal to 1 Billion Tonnes of Coal by 2019-20.

The mechanism to safeguard the environment is already in place. The project planning is carried out by integrating environmental concerns. Coal mining projects are operated after  obtaining  environmental  clearance  and  submitting  compliance  report  at  regular intervals. The coal mining projects also obtain consent to operate from State Pollution Control  Board  concerned.  In  addition,  the  mine  closure  plans  are  prepared  and approved with requisite escrow fund for sustainable post-mining land reclamation and usage for the benefit of the local population. Environmental monitoring is carried out to assess  the  efficacy  of  the  environmental  protection  measures  undertaken  and  if required,  additional  measures  are  taken  to  keep  the  environmental  attributes  within prescribed limits.

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