Coal India has declared its intent to allow thermal power plants, inclusive of independent power plants (IPPs), to increase coal supplies beyond their Annual Contracted Quantity (ACQ).

What Happened: The PSU’s decision is aimed at augmenting the volume sale of coal and is anticipated to benefit power plants that are keen on lifting higher quantities of coal beyond their specified ACQ. The company has abolished the previous provision which permitted coal supplies up to a maximum of 120% of ACQ to power plants and IPPs.

This decision was sanctioned by CIL’s Board in the final week of June, in a bid to streamline business operations and eliminate redundancy. The company currently possesses a coal stock of 72 million tonnes (MTs), which is a 47% increase compared to 49 million tonnes as of August 12, 2023.

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The company said that the move would boost its supplies at a time when coal demand is showing signs of slackening.

The company has established long-term linkages with 127 out of 153 domestic coal-based power plants and 50 out of 54 domestic coal-based IPPs. In the year ended March 2024, approximately 78% of the power generation was fueled by coal from the company’s sources.

Earlier in the month, the company announced a joint venture agreement with GAIL (India) Limited to establish a Coal to Synthetic Natural Gas (SNG) project at Eastern Coal Field. Coal India holds a majority stake of 51% in the joint venture.

The company’s net profit rose 4.24% year on year to ₹10,943.55 crore. Its revenue was up 1.33% from the previous year to ₹36,464.61 crore. The numbers surpassed the market estimates of ₹7,347 crore in net profit and ₹35,879 crore in revenue.

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