Panel moots coal linkages for power plants

The Advisory Group for Integrated Development of Power, Coal and Renewable Energy headed by current railway minister Suresh Prabhu has recommended urgent action on providing coal linkages to power plants likely to be commissioned by March 2015.

It touched upon the issues of coal block auction process, coal linkage rationalisation and swapping of coal linkages and stressed on the need for urgent action on coal linkages to power plants already commissioned, and likely to be commissioned by March 2015.

Various options should be explored to develop railway infrastructure from coal mines to main railway system, including through a JV company on infrastructure by CIL, it said.

The report also called for expediting reforms in the distribution sector with targeted actions, including privatisation or public private partnership (PPP) in distribution.

The group, set up by the government on 25 June, has also suggested that opening up of the coal sector and upgradation of state-run Coal India and its subsidiaries as also the Central Mine Planning and Design Institute Limited (CMPDI) may be necessary for enhancing domestic production.

On the power sector, the advisory group's recommendations include urgent reforms in the distribution sector, phasing out old thermal power plants which are inefficient and consume more fuel.

The recommendations on separating carriage and content by amending the Electricity Act have already been accepted by the government with the amendments being tabled in the Lok Sabha last week. The group also suggested authorising the central government for making the tariff policy obligatory to regulatory commissions.

For renewable energy, the group suggests that large scale capacity will be required to balance the power sector profile of the country. The group recommended setting up of Green Transmission Corridors, incentivising renewable capacity addition, improving the Solar Energy Corporation of India and Indian Renewable Energy Development Agency.

The group's suggestion on making it mandatory for coal-based power plants to set up renewable generation capacity and enforcing renewable purchase obligations has been included in the amendments to the Electricity Act.

''The Advisory Group interacted with officials of ministries of power, coal, new and renewable energy, environment and forest, cabinet secretariat, Central Electricity Authority, various public sector companies, consulting organisations like Mckinsey, Bain & Company, KPMG, Centre for Policy Research, World Bank, Association of Power Producers etc to ascertain their views and suggestions,'' an official statement issued on Monday said.

The government has already announced plans to augment CIL's production to an annual 1 billion tonnes by 2019.

CIl accounts for about 80 per cent of India's total coal production.