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Govt-owned coal India to import fuel for first time in years amid power outages loom: Report

By Ruchi Upadhyay 
Updated Date

New Delhi: Due to the record level of demand for electricity in many states, the power crisis is deepening. At the same time, the country is facing a shortage of coal. Most coal-fired power plants have only a few days’ stock left.

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The government-owned Coal India will import coal for use by utilities amid looming power outages because of shortages, as per the news agency Reuters report. A letter by the Power Ministry dated May 28 accessed by the news agency shows that the world’s largest coal miner for the first time since 2015 would import the fuel in an attempt to stock up and avoid a repeat of April.

The move highlights the efforts by state and central officials to avoid a situation in April when the country faced its worst power cuts in more than six years.

“Coal India would import coal for blending on government-to-government (G2G) basis and supply … to thermal power plants of state generators and independent power producers (IPPs),” the Power Ministry said in the letter dated May 28. The letter was sent to all utilities, top central and state energy officials including the Coal Secretary and the Chairman of Coal India.

India is expected to face a wider coal shortage during the third quarter of 2022 due to expectations of higher electricity demand, stoking fears of widespread power outages. The Power Ministry said in the letter the decision was taken after nearly all states suggested that multiple coal import tenders by states would lead to a confusion and sought centralised procurement through Coal India.

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India stepped up pressure on utilities to increase imports to blend with local coal in recent days, warning of cuts to the supply of domestically mined coal if power plants did not build up coal inventories through imports. But the Power Ministry on Saturday asked states to suspend tenders that are “under process”.

“The tenders under process by state generators and IPPs for importing coal for blending may be kept in abeyance to await the price discovery by Coal India through G2G route, so as to procure coal at least possible rates,” the ministry said. Coal inventories at power plants have declined by about 13 per cent since April to the lowest pre-summer levels in years.

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