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coal gasification: Notified price for coal gasification soon: Coal Ministry

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To give a fillip to coal gasification projects in the country, the Ministry of Coal is planning to offer coal at a notified price for coal gasification, a senior ministry official said on Wednesday.

“We are considering offering coal at a notified price for coal gasification plants that will be set up. We will be making a policy for the same so that the industry does not face a shortage of coal,” said Nagaraju Maddirala, the Additional Secretary, Ministry of Coal at a roadshow in Mumbai, held to push coal gasification projects.

Notified pricing means coal will be made available at a cheaper rate than its auction rate. Currently, only the power sector receives coal at a notified price. Other sectors avail of coal at auction prices.

He added that this year on, coal production in the country will touch a billion tonnes and by 2030, it will be around 1.5 billion tonnes of capacity.

Coal Gasification is a thermo-chemical process that converts coal into carbon monoxide and hydrogen, called synthesis gas or syngas. The combustion of this gas is cleaner than combustion of coal given emissions are trapped at the gasification stage.

“We want to find diversified uses for coal and ensure energy security for the country. Now that we have increased the financial support, we are confident that the industry will rise up to this opportunity,” added Nagaraju.Last month the Union Cabinet gave its nod to the Ministry of Coal’s proposal of rolling out the ambitious coal and lignite gasification programme, under which viability gap funding (VGF) worth Rs 8,500 crore will be offered to the public and private sectors.Nagaraju said, for government sector projects VGF would be Rs 1350 crore, and for the private sector Rs 1000 crore.

Around Rs 4,050 crore has been provisioned only for government PSUs, wherein up to three projects will be supported by a lump-sum grant of Rs 1,350 crore each or 15% of the capex, whichever is lower.

For the private as well as government PSUs, Rs 3850 crore has been provisioned wherein a lump-sum grant of Rs 1000 crore each or 15% capex whichever is lower will be provided.

Also, Rs 600 crore has been provisioned for demonstration projects with a lump-sum grant of Rs 100 crore or 15% of capex whichever is lower.

Currently, four coal gasification projects by PSUs are under implementation. These include projects between Coal India Ltd (CIL) and Indian Oil Corporation Ltd; Bharat Heavy Electricals Ltd (BHEL) and CIL, Gail and CIL, and NLC India and BHEL.

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