NEW DELHI: The power ministry has finally framed new rules to get electricity supply from independent power producers (IPP) in lieu of dry fuel, which is aimed at offering more freedom to states to use their allocated coal.
The new arrangement will replace the rigid practice of allocation of coal to state-owned generation plants. The decision to give more freedom to states to use coal assigned to them was taken in a Cabinet meeting last year in May.
According to the new rules, the energy generated under this arrangement will be treated as transfer of coal. It is provided that the landed cost of power from IPP generating station at the buyer’s periphery should be lower than the variable cost of the state generating station whose power is to be replaced by that of IPP.