Thermal power plants are granted Environmental Clearance (“EC”) as per the capacities mentioned in the Schedule to the Environment Impact Assessment (“EIA”) Notification, 2006. The EC is granted based on a specific coal source and any change in fuel source mandates seeking an amendment in EC. However, the Ministry of Environment, Forest and Climate Change (“MoEF&CC”) through a recent office memorandum (“OM”) dated 11.11.2020 has done away with the requirement of seeking an amendment in EC when there is a change in source of coal by thermal power plants.
The present process of seeking an amendment in EC due to a change in coal source involves certain stages and would approximately take a couple of months if not more. As per the OM, in order to simplify the procedure for change in coal source and encourage thermal power plants to use domestic coal, the MoEF&CC has decided to permit all the thermal power plants (including captive power plants) having EC to change the coal source (from imported to domestic, domestic to domestic, and domestic to imported) including lignite, without seeking the amendment in EC. As per the OM, the change in coal source can be done directly through e-auctions / short term linkages / long term linkages / other linkage options of Ministry of Coal or any organisation recognised for allotting coal linkages. However, this permission to change coal source without seeking amendment in EC is subject to the following conditions:
This decision is likely to increase the usage of domestic coal by thermal power plants as they now do not have to encounter the usual delay caused in seeking an amendment in EC. Also, this decision of MoEF&CC facilitates Ministry of Power’s policy advisory dated 28.04.2020, by which they had encouraged all the power generating companies which are using imported coal to adopt domestic coal.
Contributed by: Nawneet Vibhaw, Partner; Ashutosh Senger, Associate
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