KOLKATA | July 28, 2017: Coal India has asked five of its seven subsidiaries to keep aside a total of 40 million tonnes of coal for auction to independent power producers under the Shakti scheme.

South Eastern Coalfields and Central Coalfields will supply 12 million tonnes each, while Northern Coalfields will provide 4 million tonnes; Mahanadi Coalfields 9 million tonnes and Western Coalfields 3 million tonnes.

The quality of coal, from 31 mines, would vary from G10, or gross calorific value of 4,300-4,600, to G13 that has a range of 3,400-3,700 GCV. These grades are suitable for generating power. Bidders would seek better grades from mines closer to the plant to cut costs.

The source and quality of this coal on offer would be made available to bidders minutes before the auction. They would bid for discounts on existing tariffs and aim to get the best quality coal from the nearest source to cut costs.

Each power producer will have to bid for discounts on the tariffs mentioned in their power purchase agreements. The winner will sign a 25-year supply contract for a particular category of coal, while the second-ranked bidder can get the next-best quality.

(Source: http://economictimes.indiatimes.com/)