The coal ministry has asked Coal India Ltd and NLC India Ltd to go for pithead-based thermal projects to reduce transportation costs and improve the availability of dry fuel, a top government official said.

The plan is that all new thermal projects of Coal India Ltd (CIL) and NLC India Ltd should come up near the coal mines, coal secretary Amrit Lal Meena said.

This will reduce the dependence on transportation, which is mostly through rail and road, and make the coal accessible for usage in power generation, he said.

The move will also reduce logistics costs and cost of power generation, he said, listing the benefits of a pithead-based unit for coal companies.

Coal India has signed an agreement with Rajasthan Urja Vikas Nigam Ltd (RUVNL) for a joint venture to set up 4,100 megawatts (MW) of power generation capacity in Rajasthan, Meena said.

Of this 1,725 MW will be pithead-based capacity, 200 MW pumped storage, 50 wind while the remaining will be solar, he said.

Another coal PSU NLC and RUVNL have also signed initial agreements to set up 1,125 MW power projects in Rajasthan, he said.

PTI