Minister of Power RK Singh on August 2 told the Rajya Sabha that the pace of increase in coal production has not kept up with the increase in demand and had the country not stepped up coal imports, parts of India would have faced substantial power cuts.
Separately, the government eased imported coal blending norms for domestic coal-based power projects in a notification dated August 1. The Centre has allowed state-run and private power generators to decide on their own what percentage of coal they want to blend.
In April, the power ministry recommended that power generation companies must import coal for blending up to 10 percent to supplement the local supplies. Parts of India faced power outages in March-April with coal supplies dwindling to critical levels at power plants even as the demand for power soared to record highs due to heat waves in parts of the country and a pick-up in demand from households and industry.
Minister Singh said India would have faced substantial load shedding if the country had not stepped up coal imports.
Answering a question on why the Centre was asking states and power utilities to import coal, Minister Singh said that power consumption has increased by around 21% in the last few months, which is a record. He said that India’s power consumption soared from 935 billion units in 2013-14 to around 1,400 billion units in the last few months.
“Coal production has increased but not at a pace that it can meet our growing demand. Today, our domestic coal stock is around 23 million tonnes (MT), if we had not blended it, it would have been 7.8 MT. That would have been close to the minimum levels required. We faced this situation in October when the coal stock had reduced to 8 MT,” Singh said.
He said that there was a shortfall of 1,20,000 ton between the average daily consumption of coal and the arrival of domestic coal.
Coal India Ltd, which is the largest producer of coal in the country, has stepped up its production to produce 207.1 million tonnes (MTs) of coal from April-July’22, which is 24.3% higher than the same period a year ago.
In a statement on August 1, Coal India said that amid the escalated demand from power stations during the fiscal year, it supplied 199.4 MTs to the sector in year-to-July, up 19.2% growth.
“The current coal stock situation is comfortable to meet the present trend of demand if there is no sudden generation spike as witnessed in August’21 when the stock at power plants plummeted by 11.2 MTs in a month,” Coal India said.
The state-run near-monopoly Coal India is for the first time going to import coal to boost domestic availability. The company had issued a short-term tender that aimed at supplies for July-September in the current fiscal year and a medium-term bid for securing coal till mid-2023.
The company has secured a 6 MT supply from PT Bara Daya Energy under two medium-term bids and has the option to scale it up to 12 MT. Adani Enterprises had emerged as the best bidder for the short-term tender but the price quoted in the bid was much higher than the one in the medium-term bid so Coal India scrapped it.
Blending Norm Eased
The Ministry of Power said that it had asked power utilities to blend 10% coal in April in view of the high demand for power, depleting coal stocks and supply projections from the Ministry of Coal.
“Coal Stock position has been reviewed in the Ministry of Power. Coal Stock positions of state gencos now vary significantly. Many states have more than 50% normative levels whereas many other states have stocks in critical level,” the ministry said.
The ministry said given the coal availability at different plants, generation companies can decide the percentage of blending they want to undertake after assessing availability of local coal.
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