Power Ministry’s warning to States: Will cut domestic coal supply to state-run gencos if they delay imports

All Gencos have been advised to ensure adequate stocks at their power plants for smooth operation until October this year

Not much blending has taken place in the months of April and May 2022

The power plants (who have not yet started blending by imported coal) will ensure that they blend coal at the rate of 15% up to October 2022 and thereafter at the rate of 10% from November 2022 to March 2023

Mumbai: The power ministry, which is struggling to address the burgeoning power demand and coal demand-supply gap, on Wednesday warned that it would cut domestic coal supply to state-run generation companies (gencos) if they do not import coal for blending by June 15. ‘’If blending with domestic coal is not started by June 15, 2022, then the domestic allocation of the concerned defaulter thermal power plants will be further reduced by 5%,’’ said the power ministry in its directive to the state-run gencos.

Accordingly, revised allocation of domestic coal for the month of July 2022 onwards will be conveyed. All gencos have been advised to ensure adequate stocks at their power plants for smooth operation until October this year,’’ said the ministry. ‘’Keeping in view the likely less materialization of coal supply from domestic sources as compared with the requirement to meet power demand, domestic coal will be allocated proportionately to all gencos based on likely availability from June 1, 2022, and the balance requirement will need to be met from imported coal for blending purpose and target set for production in captive coal mines,’’ it added.

‘’Not much blending has taken place in the months of April and May 2022, the power plants (who have not yet started blending by imported coal) will ensure that they blend coal at the rate of 15% up to October 2022 and thereafter at the rate of 10% from November 2022 to March 2023,’’ said the ministry.

The ministry’s move came after it was forced to reverse its own policy to reduce coal imports in the wake of a major electricity crisis following a record rise in power demand due to heatwave. The ministry has set a target of import of 10% of coal needed by the central and state generation companies of their coal requirement for blending with domestic coal.

The ministry earlier has directed that the imported coal-based plants should run and the states should import coal for blending, as in the previous years. As reported by the Free Press Journal, the ministry had issued directions under section 11 of the Electricity Act that all the imported coal-based plants start running and most of them have started running.

‘’However, the import by states of coal for blending is not satisfactory. In 2018-19, a total of 21.4 Million Tonnes of coal were imported for blending. In 2019-20, the total import for blending was 23.8 Million Tonnes whereas in 2021-22, it was only 8.3 Million Tonnes. This is the cause of the stress in the availability of coal,’’ said the ministry.