The Cabinet Committee on Economic Affairs on Thursday approved new rules that will provide greater coal availability to stressed thermal power projects, based on the recommendations of the Group of Ministers (GoM) constituted to look into the issue.
“One of the reasons for the stress was the [non] availability of coal and that thermal projects without medium to long-term power purchase agreements (PPA) would not get coal supply,” Power Minister R.K. Singh said at a press conference.
“The new policy says that coal linkages can be given even without an existing PPA. These projects can generate power and sell it on the market or through short-term PPAs.”
The Government of India had constituted a high-level empowered committee (HLEC) under the chairmanship of the Cabinet Secretary to address the issues of stressed thermal power projects. This committee made its recommendations and submitted its report in November 2018, following which the government constituted a GoM to examine the recommendations and make their comments. The GoM approved most of the HLEC’s recommendations, which have now been approved by the Union Cabinet.
“With the implementation of these recommendations, many of the issues affecting the thermal power sector are likely to get resolved,” the government said in a release.
In a separate decision, the Cabinet also approved the investment approval for the 2x660 MW Khurja Super Thermal Power Plant (STPP) in the Bulandshahar district of Uttar Pradesh at an estimated cost of ₹11,089.42 crore, and the Amelia Coal Mine in Singraulli district of Madhya Pradesh, at an estimated cost of ₹1,587.16 crore.
The Khurja STPP is expected to improve the deficit power scenario of the northern region and particularly of Uttar Pradesh, the government said. Environmental activists, however, have protested this decision, saying that it would have a massive detrimental impact on the environment.
“This investment is going to be a disaster in multiple ways — located in the most polluted region in the world, destroy one of the oldest forests in the country, displace vulnerable communities dependent on the forest, put enormous pressure on the stressed coal power sector and increase cost of power purchase for struggling distribution companies,” Pujarini Sen, a senior campaigner at Greenpeace India, said in a note.
The Cabinet Committee on Economic Affairs also gave its approval for the investment approval for the 2x660 MW Buxar Thermal Power Project (Buxar TPP) in Buxar district of Bihar at an estimated cost of ₹10,439.09 crore.