coal sector Current Affairs - 2019

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CCEA gives Approval to New Coal Linkage Policy

The Cabinet Committee on Economic Affairs (CCEA) has approved a new coal linkage policy to ensure adequate supply of the fuel to power plants through reverse auction. The new policy will help in ensuring fuel supplies to the power plants in an organised manner.


Though, the government’s initiatives and prevailing market conditions to a large extent has helped to bring down the prices of the dry fuel and boosted the domestic production, a proper mechanism for providing coal linkages to power plants at competitive rates was lacking. The new policy will address this issue and will ensure proper sourcing of the dry fuel by the power plants as per their schedules.

Coal linkage policy

Coal linkage policy is a policy designated by the union government for the allocation of coal among thermal power plants. Inadequate availability of domestic coal coupled with high price for imported coal requires the government to allocate the available coal rationally among the power plants. This is especially necessary as the coal producing firms are public sector companies. Also, the pricing of coal is an another important issue. In this context, the government designates coal linkage policies to allocate coal among different thermal power plants.

Union Cabinet gives nod for development of Underground Coal Gasification

The Union Cabinet has approved a policy framework for development of Underground Coal Gasification (UCG) in unexplored coal and lignite bearing areas in the country.

Decision in this regard was taken by Union Cabinet Committee meeting chaired by the Prime Minister Narendra Modi in New Delhi.

What is Underground Coal Gasification (UCG)?

  • UCG is a clean coal extraction technology for extracting energy from the coal seams and lignite resources which cannot be mined through traditional mining technology.
  • It is mainly an industrial process which converts coal into product gases such as methane, hydrogen, CO and CO2 that are combusted for electricity generation.
  • The gasification process is carried out in non-mined coal seams using injection of oxidants which brings the product gas to surface through production wells drilled from the surface.

UCG Policy Framework

  • The UCG policy framework has been framed in line with the existing policy for Coal Bed Methane (CBM) development on revenue sharing basis.
  • Development of UCG has been envisaged to provide for energy security and will be adopted for offering the blocks through competitive bidding.
  • Inter-Ministerial Committee under the Union Ministry of Coal with members from concerned Ministries will be responsible for identification of the areas.
  • Central Mine Planning and Design Institute Limited (CMPDIL) will be the nodal agency for all business related proposals and regulations.