In a move to address the power shortage in the state of Kerala, the ministry of power has recommended earmarking long-term coal linkage of 500 megawatt (MW) to the state from Coal India, helping it meet its power deficit and future energy needs.
In a recent meeting of the Standing Linkage Committee (Long-Term) for power sector, the Kerala State Electricity Board informed that due to unusual growth in power consumption, the state requires 500 MW of power on an immediate basis. The Government of Kerala has said that the cost of power procured by it on a short-term basis is very high and accordingly, the state is willing to tie-up power on a long-term basis.
The power ministry has envisaged a requirement of 80 gigawatt (GW) of additional coal- based capacity by the year 2031-32 in order to meet the country’s rising power demand. Accordingly, it has requested the states including the state of Kerala, where resource adequacy studies have been completed to ensure ‘Resource Adequacy’ and urgently plan to meet the gap by either addition of new capacity, through its own resources or by floating power procurement bids under Tariff Policy, 2016 or Para B (iv) of SHAKTI Policy.
As per the resource adequacy plan prepared by the Central Electricity Authority, Kerala is required to have an additional 1,473 MW of coal-based capacity by FY32. Presently, the state only has 400 MW of thermal capacity, further requiring to tie-up 1,073 MW of additional capacity by FY32 to meet their power requirement.
To meet the deficit and balance its power purchase and financial position, the government of Kerala will be tying up 500 MW of coal-based capacity on a long-term basis through Tariff Based Competitive Bidding as per the SHAKTI policy by the government.
As per the new SHAKTI policy, para B (iv), coal linkages may be earmarked for fresh power purchase agreements, by declaring the availability of coal linkages with description, to the states. States may indicate these linkages to Discoms or State Designated Agencies (SDAs) which in turn may allocate to power plants.
Coal linkages would be earmarked to states on the recommendation of the Ministry of Power in line with the likely power deficit in the state.
“As per the timelines indicated by the Ministry of Power, the state of Kerala is planning to tie-up power from operational or under-construction capacity to be located anywhere in the country,” the government said. The tenders for procurement of power are to be floated in January 2025 and the anticipated date of coal drawl has been indicated as August, 2025.
Coal India has agreed to provide coal from its available sources to the state after the Singareni Collieries Company Ltd, another government owned coal mining company said that it could not offer the required linkage.
The Committee recommended that Coal India allocate the coal linkage for Kerala and communicate the allocation details to the state of Kerala and to the coal and power ministry.
It also noted that any delays in the Tariff-Based Competitive Bidding (TBCB) process should be promptly reported by Kerala to the coal company and the respective ministries. The successful bidder would provide power for a substantial 25-year period.
However, the state has so far not made any request to the power ministry for allocation of coal linkage for the procurement of the balance 573 MW of power that will be required to fulfill its resource adequacy plan of a cumulative 1,473 MW of coal capacity by FY32.
From: financialexpress
Financial News
