CIL drops plan to cut supplies to inefficient power plants

Coal India has abandoned its move to cut supplies to inefficient power plants following resistance from customers. It had planned to cut the yearly quota by 80 million tonnes.

A government panel had suggested introduction of an upper limit of coal supply for each megawatt of installed capacity, which reduces supply to old, inefficient plants on the basis of a formula it suggested. “We were first asked to revise the annual contracted quantities for each plant based on the recommendations by the panel,” a Coal India executive said. “However, following calculation for revised quantities, a number of plants were to receive less coal, which was not taken lightly by the power companies and we were later asked by the power ministry to abandon the initiative.”