Power Ministry asks CEA to estimate eligible amount of domestic coal for power plants

The Central Electricity Authority of India has been asked by the Power Ministry to estimate the eligible quantity of domestic coal for power plants using Shakti B policy. (Representative image)

The Union Ministry of Power has asked Central Electricity Authority of India (CEA) to estimate the eligible quantity of domestic coal for power plants using the Shakti B policy, taking into account 10 percent imported coal for blending, which is equivalent to around 15 percent of domestic coal in terms of energy.

Shakti B is a window for power plants with untied capacity to bid for coal, generate electricity with it, and sell it on the exchange under the Day Ahead Market (DAM) or DEEP portal for short-term power purchase agreements (PPAs), the power ministry said in an official statement.

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For such power plants, the ministry has directed the CEA to calculate the amount of coal utilised (purchased under SHAKTI B window) based on a mandated blending of 10 percent by weight for generation from June 15, 2022 to March 31, 2023. This calculation of coal use for the time period gives the plants a three-week opportunity to obtain imported coal.

Due to rising demand for electricity and coal supply from local coal companies falling short of demand, the power ministry said it has advised all Gencos, including IPPs, to blend 10 percent of imported coal for power generation by April 28, 2022. This was done to make up for a shortfall in domestic coal supplies.

The development comes at a time when the country is facing a recurring power crisis, as annual power demand is seen growing at the fastest rate in at least 38 years and global coal prices are trading at near-record levels due to a supply crunch resulting from the Russia-Ukraine crisis.

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