Government working on incentive-based coal scheme to help revive sick discoms


  • The government plans to push power sector reforms through its new coal supply mechanism, by ensuring that it benefits only those state distribution companies that agree to raise tariffs periodically and cut distribution losses.
  • The government is working on the incentive-based scheme to award coal supply contracts to state utilities that will distribute it to power generation firms through tariff-based bids so that plants that commit to supply electricity at the lowest rates win the deal.
  • Aggregate losses of all state power distribution companies in the country stood at Rs 69,100 crore in 2012-13.
  • The coal ministry is drafting a policy to auction Coal India contracts to power companies.
  • Coal India will also earmark 10 million tonnes of coal through spot auction for power plants stressed due to lack of coal.
  • Separate e-auctions of 5 mt of coal each will be conducted for power plants with long and medium-term power purchase agreements and projects with no contracts or short term power contracts.

Source: ET

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