Import Coal Or Face Power Crisis

R K Singh (Inset) - Stressing on coal imports

Import Coal Or Face Power Crisis

Centre Tells States Including UP

Union Power Minister R K Singh is upset at the delay in import of coal

NEW DELHI, May 18 (The CONNECT) – Expressing concern at some States, including Uttar Pradesh, not even initiating the process of importing coal to be blended with domestic fuel for thermal power plants, the Centre has waned of power crisis ahead.

On the one hand Union power Minister R K Singh dashed off letter asking states to tell Gencos to take immediate steps to import coal, while on the other the Ministry issued a veiled threat to cut domestic coal supply by 5% to force States to use 15% imported coal.

The Minister, in separate letters to Haryana, Uttar Pradesh, Karnataka and West Bengal, has expressed concern that tender process for coal import has either not started or not completed in these states.

The ministry officials, in separate letters to States, said 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.

The Ministry of Power earlier advised State Gencos to import 10% of coal requirement for blending purposes. States were advised to place order by 31.5.2022 such that delivery of 50% quantity is ensured by 30.6.2022, 40% by 31.8.2022 and remaining 10% by 31.10.2022.

Singh further asked that State Gencos may lift entire quantity of coal offered under 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 the shortfall. 

Singh warned that the allocation, if not lifted, will be allocated to other needy State Gencos.

He expressed the fear that shortage of coal in states during monsoon will adversely affect the power supply situation in the States if present state of affairs

Singh highlighted that due to increase in demand and consumption of electricity, the share of coal-based generation has increased and the total coal consumption by power plants has also increased.

Materialization of domestic coal is only about 88% of total requirements. In order to ensure minimum required coal stocks in power plants before the onset of monsoon, the Minister has directed that the thermal power plants owned by State Gencos and IPPs must use all the sources to maintain adequate coal stock.

Meanwhile, the Power Ministry has issued directions to all  Gencos that if the orders for import of coal for blending are not placed by Gencos by 31.05.2022 and if the imported coal for blending purpose do not start arriving at the power plants by 15.06.2022, all the defaulter Gencos would have to import coal for blending purpose to the extent of 15% (in order to meet shortfall of imported coal for blending purpose in Quarter1 i.e. Apr-June 2022) in the remaining period up to 31.10.2022.

It has further said that 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 Oct 2022 and thereafter at the rate of 10% from November 2022 to March 2023.

The ministry, in letter written to State Secretaries/Principal Secretaries and all Gencos, has said that 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 01.06.2022 and the balance requirement will need to be met from imported coal for blending purpose and target set for production in captive coal mines. If blending with domestic coal is not started by 15.06.2022 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 the above methodology. All Gencos have been advised to ensure adequate stocks at their power plants for smooth operation until Oct,2022.

The ministry has directed that the imported coal-based plants should run and the State should import coal for blending, as in the previous years.  Ministry of Power had issued directions u/s 11 of the Electricity Act that all the imported coal-based plants start running and most of them have started running. 

Ministry of Power (MoP) on 07.12.2021 had issued advisory to all domestic coal based power plants to import coal to meet their requirements by blending with imported coal to the extent of 4 % by State Gencos & Independent Power Producers (IPPs).  MoP had issued the revised advisory on 28.04.2022 for importing coal for blending purpose to meet the requirement at 10% of the total requirement by 31.10.2022. The requirement for blending for each Genco and IPPs at 10% was also intimated and it was advised to place the awards for import of coal (for blending) by 31.05.2022  in order  to ensure that 50% quantity is received by 30.06.2022, 40 % quantity by 31.08.2022 and 10% quantity by 31.10.2022.

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