The Coal Ministry has asked Coal India Ltd and NLC India Ltd to go for pithead-based thermal projects with an aim to reduce transportation cost and improve 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 told PTI.

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, while replying to a question on new projects of coal PSUs, the official said.

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

Coal India has signed an agreement with Rajasthan Urja Vikas Nigam Ltd (RUVNL) for a joint venture to set up 4,100 megawatt 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.

Of this, 125 MW will be a lignite-based power plant while the other will be a 1,000 MW solar power plant.

CIL is also exploring thermal projects in Uttar Pradesh and Bihar, Meena said. In UP, he said CIL is in talks with the government to form a JV to take forward the plans of setting up thermal capacities in the state.