WCL offers coal at cheaper rates to power gencos
   Date :04-Sep-2020

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Business Bureau :
WCL offers cheaper coal to power gencosIn a bid to help power gencos to reduce their generation cost, the Western Coalfields Limited (WCL), a subsidiary of Coal India Limited (CIL), has offered substantial additional quantity of coal to different power gencos of Central, West and South India at a cheaper landed price. This will not only help the gencos to minimise their cost to reduce power tariff but will also be a factor to cut down import of thermal coal in the interest of the nation.WCL has the advantage of having its mining operation in Central India.
This helps consumers of Central, West and South India to get cheaper landed coal due to advantage in lesser Railway freight in comparison to other coal companies of CIL located in Eastern part of the country. With locational advantage and phenomenal growth in production, WCL has offered 20-25 million tonnes of coal to State gencos, NTPC and other independent power producers (IPPs) by swapping their linkage from other coal companies. It will be in addition to their existing linkage quantity with WCL.
In a series of detailed discussions during the last two days with WCL and State gencos of Maharashtra, Madhya Pradesh, Karnataka, Gujarat followed by NTPC and IPPs, all parameters of existing linkage and future swapping has been discussed along with financial benefit to gencos. Efforts will be made to complete the swapping procedure at the earliest so that WCL may start dispatching the additional quantity by October 2020. The additional quantity offered for swapping ranges from 3-6 million tonnes to different gencos depending on their requirement.
The quantity will further increase in future subject to availability of more surplus coal.The coal production in WCL had gone down to a level of 39 million tonnes during 2013-14. And thus the power consumers had no option but to take coal from other subsidiaries of CIL viz. SECL, MCL and also from SCCL. Due to long distance, the consumers had to pay more on Railway freight making the landed price of coal higher. However, WCL opened 20 projects in the last 6 years which contributed 36 million tonnes production during 2019-20. WCL produced about 58 million tonnes of coal during 2019-20 even after losing 22 million tonnes of production during the last 6 years due to exhaustion of reserves. WCL has now planned to open further 20 projects to take the production level to 75 million tonnes by 2023-24 and 100 million tonnes by 2026-27. With substantial growth in coal production, WCL has now sufficient coal to offer to its nearby consumers at a cheaper landed price.