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1 linkages would be awarded to designated state-owned power DIS- rationalisation of Coal linkages, including swapping of imported coal
Photograph by Biswarup Ganguly, wikimedia commons

Planning of Pit head power plants COMs. The state through DISCOMs then award coal linkage according being transported to hinterland with domestic coal transported near
Coal India, SCCL (Singareni Collieries Com- to applicant’s need, efficiency and cost of power to the power plants coastal areas.
pany) and captive miners are suggested to in its territory including the private sector. Allocation to private sec-
have pit head plants which will substantially tor will be made through auction. opportunities
reduce power consumption cost.
SHAKTI – the new coal linkage policy: The Scheme for Harnessing Coal is a low-cost fuel for power generation in India. According to NITI
2 and Allocating Koyla (Coal) Transparently in India (SHAKTI) was Aayog’s Draft National Energy Policy 2017 report, coal-based power
generation capacity is likely to reach 330-441 GW by 2040 from 192
announced in May 2017. The objective was to allocate coal linkages
Clean coal technologies (buying coal from a mine closer to the power plant) to the regulated GW in FY 2017.
Modern practices like UCG (Underground coal sectors in a transparent and objective manner. The Policy provides
gasification), CTL (Coal to Liquid) and CBM (Coal coal linkages to power plants, which lack Fuel Supply Agreements Conclusion
Bed Methane) will help in reducing dependence (FSAs) through coal auctions.
on import for crude oil & natural gas. This will The auctioning coal linkages through SHAKTI have given consum- India largely depends on imported coal and steps to reduce coal im-
also reduce carbon footprint. ers the option to bid for a source of their choice, thereby reducing ports and smooth development of coal mines need to be taken. Some
coal transportation costs. The policy is an important initiative in al- of them are:
leviating one key challenge in power sector, viz. lack of coal linkage • Promote international collaborations for bringing in techno-
3 and is expected to positively contribute in resolution of a number of logical up-gradations in the sector, which in turn would en-

stressed assets.
sure investment in the sector from various countries.
Coal off-take and logistics The coal ministry has amended the eligibility norms for the SHAK- • Establishing a single window clearance process for coal
Sourcing coal from nearest coal mines will TI transparently in India, effectively allowing more power generating mines
help in reducing transportation cost. companies to procure the fuel through this route. Ministry will soon • Support in land acquisition and Resettlement and Rehabil-
launch the second round of SHAKTI scheme. itation (R&R) related issues to ensure timely and smooth
4 Coal Linkage Policy for non-regulated sector: The coal supply to • completion.
The Government has now decided to permit 100% FDI under
Competition in Coal mining Non-Regulated Sector (NRS) is through FSAs based on their long-term automatic route for sale of coal, for coal mining activities
Commercial mining is expected to bring process linkage /Letter of Assurance (LoA). According to this policy, all allo- which would fully open up coal mining to foreign players.
optimisation and inculcation of modern practic- cations of linkages/LOAs for non-regulated sector viz. Cement, Steel/ • Establishing a coal regulator to resolve the conflicts and set-
es leading to reducing cost of mining. Sponge Iron, Aluminium and others [excluding fertilizer (urea sec- tle disputes related to coalmines. The coal regulator will also
tor)] are auction based. Proportion of coal allocation between power help in monitoring performance of coal miners and utilising
and non-power sectors is 75% Power and 25% Non-power. capacity.
Coal India Ltd has been conducting linkage auctions under Non-Reg-
5 ulated Sector, including for Steel, Cement & Sponge Iron, and FSAs are

Coal Washing signed with the successful bidders by the subsidiary coal companies
Will reduce ash content in coal, improve plant of CIL. In the case of steel PSUs, coal supplies through MoU are made
thermal efficiency and reduce emissions. to SAIL and RINL.

Rationalisation of Coal Linkage: Ministry of Coal has issued the Pol-
icy for Linkage rationalisation for IPPs in 2018, which started with
rationalisation of linkages of State/ Central Gencos. As per this policy,
CIL has rationalised for a quantity of 5.42 MT for State/Central Gencos 1 World Coal association
Mock-up of a coal mine, Ranchi Science with a potential savings of INR 292 Crores (USD 41.3 mn) which is un- 2 Provisional Coal Statistics
Centre, Jharkhand, India der the process of implementation. There is also possibility of further 3 Ministry of Coal

50 shaping new energy dimensions energising sustainable & prosperous Future 51