The government has lifted restrictions on coal purchases for power plants, allowing them to source coal freely from any supplier. This decision aims to improve fuel availability for thermal power stations, ensuring a steady supply of electricity across the country. The move is expected to help power producers manage their coal supply more efficiently and reduce dependence on limited sources.
Previously, coal procurement for power plants was regulated under the New Coal Distribution Policy (NCDP). The policy mandated coal supply through long-term agreements with state-run suppliers. However, power plants often faced shortages due to supply constraints, transportation issues, and rising demand. By removing these restrictions, the government seeks to make coal sourcing more flexible, preventing disruptions in power generation, particularly during peak seasons.This decision comes as the country experiences increasing power demand driven by industrial growth, infrastructure development, and rising household consumption. By allowing power plants to purchase coal from multiple suppliers, including private miners and imports, the government aims to enhance competition in the sector. It is also expected to ease the burden on state-run coal producers, allowing them to focus on improving production capacity and efficiency.
Industry experts believe this move will bring greater transparency and efficiency to the coal procurement process. Power plants will now have the flexibility to negotiate better prices and secure uninterrupted fuel supplies. Additionally, the reform aligns with the government’s broader objective of energy security and economic stability, ensuring that power generation remains reliable for industries, businesses, and households across the country.