State-run miner Coal India on Tuesday said that it has paved the way for allowing coal supplies beyond annual contracted quantity (ACQ) to the country’s thermal power plants, including independent power plants (IPP).

With this, CIL has done away with the earlier provision which allowed coal supplies up to a maximum of 120 per cent of ACQ to power plants and IPPs.

“Now, the simplification will benefit the power plants which prefer to lift higher quantities of coal beyond their stipulated ACQ. The fillip for CIL is that it will boost its supplies at a time when coal demand is showing signs of slackening,” Coal India said in a stock exchange filing.

CIL’s board cleared the decks for allowing supplies beyond annual contracted quantity (ACQ). This new measure will also apply to the Gencos (power generation companies), which have signed the fuel supply agreements (FSAs). The coal miner feels this move will usher in an ease of doing business, simplicity and avoid duplicity of work. It is also aiming at increasing the company’s volume of sale for coal.

Coal India’s pitheads currently have a coal stock of 72 million tonnes (mt) which is around 47 per cent more than 49 mt as of 12 August, 2023.

“Supplies to coal-fired plants peaked to an unprecedented 619.7 mt in FY24, meeting 101.6 per cent of the demand projected. Compared to 586.6 mt off-take to power sector in FY23, the increase in volume terms was 31.9 MTs, which was a growth of 5.4 per cent,” Coal India said in the filing.

Out of the total 153 domestic coal-based power plants in the country, CIL has long-term linkages with 127 plants comprising 592 mt. The country has a total of 54 domestic coal-based IPPs and CIL has linkages with 50 of them for 155.7 mt per annum.

During the last financial year, 1,177 Billion Units (BU) of power was generated through domestic coal-based power plants. Of this, tentatively 78 per cent was fuelled by the coal from CIL sources.

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