Shares of power producing companies closed with big gains after Prime Minister Manmohan Singh initiated the clearance of coal supply to private sector power producers.
"Prime Minister initiates clearance of coal supply to private sector power producers. Coal India will sign long term Fuel Supply Agreements," a tweet from the PMO account said.
Shares of Adani Power jumped 13 per cent, Reliance Power soared 12.7% and Tata Power ended 6 per cent higher on the Bombay Stock Exchange. The BSE Sensex surged 353.84 points or 1.98% to 18,202.4.
Last month, CEOs and promoters from the power sector had met Prime Minister Manmohan Singh to discuss the power crisis. One of their key demands was higher allocation of coal from state owned miner Coal India. Many power plants are underutilized because of fuel shortages and several under construction plants are finding it difficult to find affordable coal or natural gas. Coal fired power plants account for more than half of India's power generation.
Coal India will sign agreements for supply of fuel to power projects commissioned up to December 2011 by March end. The decision is an outcome of the meeting of Committee of Secretaries (CoS) constituted by the Prime Minister to look into issues impacting the power sector, held on February 1.
During that meeting, it was agreed that Coal India would sign Fuel Supply Agreements (FSAs) with power plants that have entered into long-term Power Purchase Agreements (PPAs) and have been commissioned or would get commissioned on or before March 31, 2015.
"For power plants that have been commissioned up to December 31, 2011, FSAs will be signed before March 31, 2012," the Prime Minister’s Office said in a statement today.
Further, the FSAs would be signed for full quantity of coal mentioned in the Letters of Assurance (LoAs) for a period of 20 years. If the supply is below 80 per cent, then Coal India would be penalised whereas in case the supply is above 90 per cent, the company would be provided incentive.
In case, Coal India is unable to meet the obligations, the company would have to arrange for fuel through imports or other arrangements, the statement said.
Noting that the proposed course of action has been approved by the Prime Minister, the statement said these arrangements would provide relief to power plants with estimated capacity of more than 50,000 MW.
(with PTI inputs)
Shares of power producing companies closed with big gains after Prime Minister Manmohan Singh initiated the clearance of coal supply to private sector power producers.
"Prime Minister initiates clearance of coal supply to private sector power producers. Coal India will sign long term Fuel Supply Agreements," a tweet from the PMO account said.
Shares of Adani Power jumped 13 per cent, Reliance Power soared 12.7% and Tata Power ended 6 per cent higher on the Bombay Stock Exchange. The BSE Sensex surged 353.84 points or 1.98% to 18,202.4.
Last month, CEOs and promoters from the power sector had met Prime Minister Manmohan Singh to discuss the power crisis. One of their key demands was higher allocation of coal from state owned miner Coal India. Many power plants are underutilized because of fuel shortages and several under construction plants are finding it difficult to find affordable coal or natural gas. Coal fired power plants account for more than half of India's power generation.
Coal India will sign agreements for supply of fuel to power projects commissioned up to December 2011 by March end. The decision is an outcome of the meeting of Committee of Secretaries (CoS) constituted by the Prime Minister to look into issues impacting the power sector, held on February 1.
During that meeting, it was agreed that Coal India would sign Fuel Supply Agreements (FSAs) with power plants that have entered into long-term Power Purchase Agreements (PPAs) and have been commissioned or would get commissioned on or before March 31, 2015.
"For power plants that have been commissioned up to December 31, 2011, FSAs will be signed before March 31, 2012," the Prime Minister’s Office said in a statement today.
Further, the FSAs would be signed for full quantity of coal mentioned in the Letters of Assurance (LoAs) for a period of 20 years. If the supply is below 80 per cent, then Coal India would be penalised whereas in case the supply is above 90 per cent, the company would be provided incentive.
In case, Coal India is unable to meet the obligations, the company would have to arrange for fuel through imports or other arrangements, the statement said.
Noting that the proposed course of action has been approved by the Prime Minister, the statement said these arrangements would provide relief to power plants with estimated capacity of more than 50,000 MW.
(with PTI inputs)
Shares of power producing companies closed with big gains after Prime Minister Manmohan Singh initiated the clearance of coal supply to private sector power producers.
"Prime Minister initiates clearance of coal supply to private sector power producers. Coal India will sign long term Fuel Supply Agreements," a tweet from the PMO account said.
Shares of Adani Power jumped 13 per cent, Reliance Power soared 12.7% and Tata Power ended 6 per cent higher on the Bombay Stock Exchange. The BSE Sensex surged 353.84 points or 1.98% to 18,202.4.
Last month, CEOs and promoters from the power sector had met Prime Minister Manmohan Singh to discuss the power crisis. One of their key demands was higher allocation of coal from state owned miner Coal India. Many power plants are underutilized because of fuel shortages and several under construction plants are finding it difficult to find affordable coal or natural gas. Coal fired power plants account for more than half of India's power generation.
Coal India will sign agreements for supply of fuel to power projects commissioned up to December 2011 by March end. The decision is an outcome of the meeting of Committee of Secretaries (CoS) constituted by the Prime Minister to look into issues impacting the power sector, held on February 1.
During that meeting, it was agreed that Coal India would sign Fuel Supply Agreements (FSAs) with power plants that have entered into long-term Power Purchase Agreements (PPAs) and have been commissioned or would get commissioned on or before March 31, 2015.
"For power plants that have been commissioned up to December 31, 2011, FSAs will be signed before March 31, 2012," the Prime Minister’s Office said in a statement today.
Further, the FSAs would be signed for full quantity of coal mentioned in the Letters of Assurance (LoAs) for a period of 20 years. If the supply is below 80 per cent, then Coal India would be penalised whereas in case the supply is above 90 per cent, the company would be provided incentive.
In case, Coal India is unable to meet the obligations, the company would have to arrange for fuel through imports or other arrangements, the statement said.
Noting that the proposed course of action has been approved by the Prime Minister, the statement said these arrangements would provide relief to power plants with estimated capacity of more than 50,000 MW.
(with PTI inputs)
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