The government is unlikely to make it mandatory for thermal power plants to blend imported coal for electricity generation this summer, when demand tends to spike, unlike the previous few years.
Thermal power plants have adequate coal stocks at about 51 million tons, which can last at least 21 days, a senior power ministry official said.
“For the coming months too, the coal ministry is confident about providing enough supplies to the power plants. Hence, the mandate on mandatory blending of imported coal does not seem necessary as of now,” the official told Moneycontrol on condition of anonymity.
This will be the first time in more than three years that the government will not impose such a mandate.
The order was first imposed in October 2021 when domestic coal stock at thermal plants depleted to “critically low levels”. The order, aimed at easing the burden on domestic coal, was repeatedly issued during the next summer and extended to even monsoon and winter seasons.
The last such order came in September 2023 and was to remain in place till March 2024 but was extended to June and then to October. No order has been issued since.
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India has one of the largest coal reserves in the world. Domestic coal is cheaper for power generation, which, in turn, keeps tariffs low. In previous years, thermal power plants have faced a coal crunch due to logistics issues. Hence, imported coal, which is expensive, is used for blending.
India is anticipating a record peak power demand of 270 gigawatts (GW) this summer, minister for power Manohar Lal Khattar said on February 21.
“This year, we have enough coal stocks at thermal power plants and the ministry is confident on meeting a peak demand of up to 270 GW this summer,” he said told mediapersons in Delhi.
The coal ministry will supply at least 906 million tonnes (MT) of coal to energise India's thermal power plants to meet the peak demand.
Coal-fired power is going to be the main source to meet the peak power demand this year as well.
“The energy mix to meet the projected demand this summer is going to remain the same, with the share of renewables increasing marginally by 2-3 percent. Thermal, last year, contributed 74 percent to meet the peak demand of 250 GW. This year, too, we expect the contribution of thermal power in the range of 70-74 percent. The contribution of hydropower is going to remain the same ranging from 7-11 percent,” Central Electricity Authority (CEA) chairperson Ghanshyam Prasad told Moneycontrol.
When asked about the possibility of imported coal-based and gas-based power plants being asked to mandatorily run at full capacity during the crunch period, Pankaj Agarwal, secretary, power ministry, said it would depend on the situation. “As of now we have not ordered it but if there is any crunch projected in meeting the peak demand, we would impose if the situation demands,” Agarwal said, referring to Section 11 of the Electricity Act, 2003.
Section 11 allows the government to direct power-generating firms to operate and maintain power stations during extraordinary circumstances. The government has used the provision to issue directions to both coal and gas-fired power plants to meet power demand.
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