States will be given coal linkages, so that they can use the coal for their own power plants. A framework on coal linkages is a work-in-progress, says Piyush Goyal, Minister of Power, Coal, New and Renewable Energy.
Speaking exclusively to CNBC-TV, Piyush Goyal, Minister of Power, Coal, New and Renewable Energy, said the Ujwal DISCOM Assurance Yojana or UDAY is a voluntary scheme. Under this scheme, states will take over 75 percent of the debt of discoms.
About 18 states so far have come on board the UDAY, he said.
Regarding coal supply, he said there is no shortage of coal. Ëvery power company has sufficient coal, he said, adding that the government has managed to convert the country from one of coal shortage to one of surpluses.
States will be given coal linkages, so that they can use the coal for their own power plants. A framework on coal linkages is a work-in-progress, he said.
He also reiterated that generation of hydro and wind energy are also key focus areas.
Below is the transcript of Piyush Goyal\\'s interview with CNBC-TV18\\'s Farah Bookwala Vhora.
Q: I want to start by asking you that seven discoms are now brought under the UDAY scheme and a little while ago while we were discussing you were talking about several other states as well being brought on board. Can you help us understand which states would be ready to join the UDAY scheme and what kind of incentives are you offering these states to sort of lure them under the UDAY scheme because that seems to have a lot of promise as you pointed out in your earlier conference?
A: First of all the data needs to be corrected. 18 states had already agreed to join UDAY and one union territory. There were nearly 12 - some states and some union territories - which did not have a spate discom. They were a part of the state government itself, of the utility, like we had the Maharashtra State Electricity Board (MSEB) earlier. So, 12 of them are coming under that framework. So, there were only these five states which went to poll and maybe one or two states which had not yet joined UDAY.
I don\\'t lure anybody, it is a voluntary scheme, why should I be wanting to lure them. I have brought out a scheme, this central government has brought out a scheme in consultation with all stakeholders. It is a scheme prepared by the stakeholders themselves to benefit the states and the people of the states.
In a federal structure the centre is not trying to impose anything on them. It is for the states to chose if they want to serve their people better with 24/7 affordable power then it is good for them to join UDAY. If they still chose not to join UDAY I don\\'t have to lure them but the people of that state will ensure that they want to join UDAY.
Q: As far as coal linkages for power plants go, help us understand the final contours of the auctions and help us understand when is that the power ministry would be finally seeking approval from the cabinet because this is something that has been on the anvil for some time now?
A: Well, as you are aware the auction of the non-regulated sector will be launched next month. As far as the regulated sector goes by and large there is no shortage of coal as such, so the hurry is no more there. Every power plant in the country has sufficient stocks of coal. In fact, we are approaching power plants to lift coal, otherwise last four months I have had to regulate coal production given the excess inventory that we have. We have converted a country of shortages to a country of surpluses already and imports are drastically falling. Last year we saved Rs 24,000 crore of imports of coal. This year our target is to save Rs 40,000 crore of coal imports.
Having said that, we certainly would like to give more certainty to the availability of coal for which we are working on the contours of a final policy. Largely it will help states which want to bid out fresh power purchase agreements (PPA) so we will give out coal to the state and they can offer that coal and allow power plants to bid for supplying electricity and whoever supplies it as the lowest cost can then become eligible to get that linkage. So states will be given the linkage. Further states will be given coal linkages which they can use for their own plants or through a process they can give to other plants in their states and lastly there are many companies which have power purchase agreements but don\\'t have an assured supply of coal. We are trying to work on a framework where there will be an auction even of coal linkages to such companies and they can bid transparently and see if they can re-assure their coal supply.
Q: A little while ago a journalist friend asked you what are your top three priority areas over the next two years that are to come and one of the points that you mentioned was the generation hydro and wind energy over the next 12 months, that is going to be a priority area. Can you outline the steps that you are going to specifically take in order to sort of give thrust to these two areas because we have seen enough thrust on the solar side but not enough on these two areas?
A: There has been thrust on these two areas also but it was facing certain resistance which over the last year with the resounding success of solar and the bidding process that we initiated in solar has possibly finally helped the other sectors also realise that they should consider going the solar way.
So, now the wind manufacturers and wind developers are themselves talking to us that maybe we should initiate a bidding process also for wind which we are now in the stage of finalising. Cost plus is basically an inefficient way of doing things.