CIL signs fuel supply agreement with NTPC

Santanu Saraswati
The country’s largest power generation company, National Thermal Power Corporation Ltd (NTPC), on Friday signed the much-awaited fuel supply agreement (FSA) with Coal India Ltd.
The tenure of FSA will be 20 years and becomes effective from April 2009 in accordance with the National Coal Distribution Policy (NCDP) of the Union coal ministry, and Central Electricity Regulatory Authority (CERA) regulations.
CIL chairman, Partha S Bhattacharyya, said that half the power-generating companies were coal-based, and that CIL could only cater to 75 per cent of their need.
“There is always a big gap between demand for and supply of coal, which is around 230 million tonne every year. The FSA will benefit both the coal-supplying agencies as well as thermal power generation companies for getting their requirement as per the agreement with the CIL,” Bhattacharyya said.
The FSA will benefit both the coal-supplying agency and the state-run power utilities. While the FSA will provide bonus payment to CIL for 100 and above 100 per cent supply, power-generating companies, too, from now on, penalise the CIL agencies for less than 85 per cent fossil fuel supply to their generation stations.
In the same manner, CIL could now penalise up to 40 per cent of the total price of coal to be supplied to power generating companies, for less than 80 per cent lifting from its mines.
During the current financial year, CIL will be supplying 313 million tonne of coal to the power generating stations in and across the country. CIL will be supplying 306 million tonne of coal to the existing government-run power generation companies and the rest seven million tonne will be supplied to the upcoming power plants.
“The NTPC is the largest thermal power-generating company with an installed capacity of 23,895-mega watts in the country. So CIL will be supplying 114.7 million tonne of coal to all its 15 generating stations. The rest will be supplied to the other state-run power utilities and the Damodar Valley Corporation,” Bhattacharyya added.
The chairman-cum-managing director of NTPC, R.S. Sharma, said that both NTPC and CIL were moving ahead by diversifying their value chain. “Just to take our efforts a little further, NTPC and CIL have already decided to form a joint venture company to work on Brahmani-project where CIL will apply its expertise in coal mining, NTPC will do so in thermal power generation. Apart from this, both NTPC and CIL will be working as two major partners in an international coal venture for acquiring coal properties abroad. The JV has already planned to work in East Africa and Australia for the purpose,” Sharma said.
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