Cabinet nod for flexible domestic coal use to cut costs

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SME Times News Bureau | 05 May, 2016
The union cabinet on Wednesday approved a proposal to permit flexibility in usage of domestic coal towards bringing down the cost of power generation.

"The union cabinet has approved a proposal to provide flexibility in utilisation of domestic coal for reducing the cost of power generation at its meeting held today (Wednesday)," Power Minister Piyush Goyal told reporters after the cabinet meeting.

The measure will help reduce the cost of power generation by 40-50 paise per unit and will lead to savings of Rs.25,000 crore per annum in 4-5 years, Goyal said.

"This proposal is in line with the UDAY scheme of the government, which also envisages liberally allowing of coal swaps from inefficient plants to efficient plants and from plants situated away from coal mines to pit head to minimize cost of coal transportation thus leading to reduction in cost of power," an official statement said.

"There shall be flexibility in use of such coal amongst the generating stations of state owned utilities, plants of other state power utilities, company owning the central generating stations and IPPs (independent power producers), amongst each other," it added.