Rationalization of coal linkages results in rationalizing 92.16 MT of coal with potential savings of Rs 6,420 cr

So far, four rounds of rationalization of linkage have taken place, covering 73 Thermal Power Plants (TPPs), out of which 58 belong to State/Central Gencos and 15 to IPPs, according to the Coal Ministry

The policy involved reducing the distance in transportation of coal from coal mines to consumers, thereby decreasing transportation costs and increasing efficiency in coal-based power generation, it said.

This policy aims to substantially reduce transportation costs thereby curbing fuel expenses, delivering tangible benefits to consumers.

Coal linkage rationalization in the power sector has resulted in a decrease in transportation costs from the mines to the power plants leading to more efficient coal-based power generation.

The exercise helps in reducing the load on the transportation infrastructure, easing the evacuation constraints as well as reducing in landed cost of coal, the Ministry said.

Linkage rationalization for State/Central PSUs was implemented initially, based on the recommendation of the Inter-Ministerial Task Force (IMTF) which was constituted in June 2014.

Another IMTF was constituted in July 2017 to rationalize the linkages of the Independent Power Producers (IPPs).

The methodology for rationalization of coal for IPPs/Private sector plants was also issued on 15.05.2018.

An IMTF was also constituted in October 2018 to examine the possibility of further rationalization of coal linkages, including Swapping imported coal being transported to hinterland with domestic coal transported near coastal areas.

As part of the Ministry of Coal's comprehensive strategy for the rationalization of coal linkages, Coal India Limited has taken a significant step by inviting Expression of Interest (E.O.I) from both Independent Power Producers (IPPs) and Generating Companies (Gencos).

Through the Rationalization of Coal Linkage, Coal PSUs are not only optimizing operational efficiency but also driving down costs and fostering a more sustainable energy ecosystem, the ministry said.