State-run Coal India Ltd (CIL) has invited applications from independent power producers to take part in the auction of coal linkages under the Scheme for Harnessing and Allocating Koyala Transparently in India (Shakti), a notice said on Monday.
The miner asked "interested entities" to register on the website of auction firm MSTC Ltd "on or before August 7, 2017".
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In May, the Ministry of Coal had directed the coal producer that the miner may grant coal linkages to the power producers or independent power producers (IPPs) having long term power purchase agreements.
Citing the ministry's letter, the notice said, "CIL/SCCL (Singareni Collieries Company Limited) may grant coal linkages on notified price on auction basis for power producers/IPPs having already concluded long term PPAs based on domestic coal."
The ministry also said the coal linkage auction would be based on discounts on the power tariff.
"Power producers/IPPs, participating in auction will bid for discount on the tariff (in paise/unit)," the ministry's letter said.
The discount by generating companies would be adjusted from the gross amount of bill at the time of billing, i.e., the original bill shall be raised as per the terms and conditions of the PPA and the discount would be reduced from the gross amount of the bill.
"Accordingly, PPA may be amended or supplemented mutually between the developer and the procurer to pass on the discount to the procurer," the letter said.
The ministry had also said CIL/SCCL may grant future coal linkages on auction basis for power producers/IPPs without PPAs that are either commissioned or to be commissioned.
"All such power producers/IPPs may participate in this auction and bid for premium above the notified price of the coal company," it added.
