CCEA approves common e-auction of coal for power & non-power coal users

The decision comes at a time when the non-power coal users also known as the non- regulated sector had been raising concerns over shortage of supply of coal which is impacting their businesses.

Non-power sectors like aluminum, cement, steel, sponge-iron, paper, fertilizer, chemical, rayon and their captive power plants are mostly dependent on domestic coal as fuel and also as a direct feed in the manufacturing process.

The CCEA chaired by Prime Minister Narendra Modi approved offering of all the non-linkage coal by coal companies through one e-auction window of Coal India/Singareni Collieries Company (SCCL).

"This e-auction will cater to all the sectors namely power sector and non-regulated sector (NRS) including traders and coal would be offered through this auction in place of the present system of sector specific auctions," an official statement issued here stated.

These auctions will be subject to CIL / SCCL meeting the coal linkage requirements against existing linkages and do not impact the current linkages to power and non-power consumers at contracted prices, it said.

"Market distortions would be removed and single rate for all the consumers will evolve in the e-auction market. It shall increase operational efficiencies and lead to an increase in domestic coal demand by efficiency in domestic coal market," it noted Besides the discretion presently vested in coal companies of allocating coal to different end use sectors will be eliminated.

Further the coal companies shall be able to establish coal gasification plants by availing coal from their own mines. It will help in developing clean coal technology in the country, the government said.

Under this, coal offered through the single e-auction window would be transport mode agnostic with default option being through rail mode.

"However, coal may be lifted by the consumers through the road mode/other modes depending upon their choice and suitability without paying any additional charges or discount to the coal companies," it said.

Long term allotment of coal by CIL/SCCL, without affecting the supplies against existing coal linkages, to their own gasification plants shall be allowed at prices as may be decided by the coal company.

However, the taxes, duties, royalty etc shall be paid by the coal companies on the notified prices of coal for power sector.

The government further said that removal of market distortions through offer of coal under a single e-auction window at the same rate for all the consumers of the economy will attract more consumers towards domestic coal.

With this, the government expects the demand of domestic coal to increase. CIL also has ambitious coal productions plans for the future with an aim of producing one billion tonne coal by 2023-24.

"Hence, with better availability of domestic coal with better price stability and predictability, the import of coal is expected to come sown drastically. This would reduce the dependence on imported coal and would help to make Atmanirbhar Bharat," it said.