Import coal for blending by June 15 or face 5% domestic supply cuts: Power ministry to Gencos
Power minister R K Singh has also separately written to chief ministers of Haryana, Uttar Pradesh, Karnataka and West Bengal for delaying the process of coal imports
New Delhi: The Union power ministry has warned of cutting domestic coal supply by 5% to generating companies (gencos) if they do not import coal for blending by June 15.
Power minister R K Singh has also separately written to chief ministers of Haryana, Uttar Pradesh, Karnataka and West Bengal for delaying the process of coal imports.
In a letter to all gencos and state secretaries/principal secretaries on Tuesday, the ministry said “not much blending has taken place in the months of April and May this year”. It further directed them to place all orders for imported coal by May 31 following which imported coal should start arriving from June 15.
“If blending with domestic coal is not started by June 15, then the domestic allocation of the concerned defaulter thermal power plants will be further reduced by 5%. Accordingly, revised allocation of domestic coal for the month of July, 2022 onwards will be conveyed based on this methodology,” the letter said.
“All gencos have been advised to ensure adequate stocks at their power plants for smooth operation until October, 2022. So, 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,” it added.
The ministry’s letter came at a time when the country’s power demand is expected to see a fresh rise during the monsoon season as a result of increased humidity. An unusually hot summer had also led to unprecedented demand for electricity as authorities scrambled to build coal inventory at energy utilities to prevent outages.
The power ministry is trying all means to increase power generation in the country and is even running non-operational or stressed imported coal-based power plants. Besides, it has asked gencos to increase their imports so as to ease the burden on domestic coal.
The ministry has directed the gencos to import 10% of their coal requirement for blending purposes. It has also asked them to place orders in such a way that 50% quantity is ensured by May 31, 40% by June 30 and 10% by October 31, according to the letter.
Senior officials in the ministry said the measures were being taken keeping in view the likely less materialisation of coal supply from domestic sources as compared to the requirement to meet the power demand.
“Domestic coal will be allocated proportionately to all gencos based on likely availability from June 1. The balance requirement will need to be met from imported coal for blending purposes and the target set for production in captive coal mines,” an official said, seeking anonymity.
Besides this, the ministry said that states such as Haryana, Uttar Pradesh, Karnataka and West Bengal have either not started the tender process or completed the process for coal import.
“If the present state of affairs continues, it may lead to shortage of coal in states during the monsoon, thereby adversely affecting the power supply situation in these states,” Singh said.
In a statement later on Wednesday, the ministry said that Singh “has made it clear that state gencos should be able to lift the entire quantity of coal offered under rail-cum-road (RCR) mode expeditiously to build coal stock.”
“He stressed that in case of failure on either account, it would not be possible to give additional domestic coal to make up for the shortfall. If RCR allocation is not lifted, it will be allocated to other needy state gencos,” it added.
In 2018-19, a total of 21.4 million tonnes of coal were imported for blending. In 2019-20, the figure stood at 23.8 million tonnes whereas in 2021-22, it was only 8.3 million tonnes, data from the ministry showed.
Last year, the peak power demand recorded on July 7 was 200,570 MW. The record was broken much earlier this year when India’s peak power demand touched 207,111 MW on April 29 due to an earlier-than-expected heatwave across the country last month.
The heatwave was so intense that average temperatures in April in northern and central India proved to be the highest in about 122 years.
The ministry has projected that this record is also likely to be broken in the coming months with the peak electricity demand ranging between 215,000-220,000 MW.