First phase: Coal supply recast to save Rs 6,000 crore in transport cost

NEW DELHI: The government has completed the first phase of redrawing the country's coal supply map for power stations, generating annual savings of Rs 1,000 crore in transportation costs, coal secretary Anil Swarup told TOI.

The savings are estimated to rise to Rs 6,000 crore a year once the entire plan to optimize coal supply chain for power stations across the country by swapping linkages ­ essentially quota of a power plant from a particular mine ­ is completed.

In the first phase, linkages of 19 units have been swapped involving 14 million tonnes of coal. In other words, this much coal is moving lesser distance on rail since the linkages have been swapped in a way that each power station is getting fuel from a nearer source.

Due to historical legacy , most of the power stations currently get supplies from mines located far away . For example, a power plant in the western region could be getting coal from a mine in the east, while a generation unit in the east could be getting fuel from central parts that are closer to the western region.

Since transportation forms part of the variable cost of power tariff that is passed on to consumers, any reduction automatically brings down the cost of power for consumers. The reduced transit time also results in improved fuel stock, which allows generation stations to run at higher capacity and make more electricity available.

A dozen of the 19 power plants that have gone for linkage swaps have already implemented the new supply arrangement. Five more FSAs (fuel supply agreements) for swapping linkages between GSECL and MahaGenco are ready for signing and two between generation utility NTPC and SCCL are in an ad vanced stage of negotiations.But second phase of the swaps poses a technical problem since it involves imported coal.