Increased demand for power has compelled the Indian government to make a U-turn on its previous stance on reducing imports, as it asks power plants to increase their sourcing of imported fuel to ensure uninterrupted operations.
In a latest development, the power ministry has directed state-run as well as independent power plants to import 15 million tonne (mn t) of coal for blending purposes by May’22.
Capacity in mega watt | Imports in mn t
The estimate has been made taking into account imports for blending up to 4% of the total coal requirement while considering an operating parameter of 85% plant load factor (PLF).
Power plants shy away from imports
The need for imports for blending has arised on the back of drastic fall in coal inventory levels, at a time when indigenous coal supplies have failed to satisfy the increased demand.
Central Electricity Authority (CEA), the country’s energy planner, has already advised the power producers to import coal for blending up to 10%. Further, the plants were permitted to increase the ratio to 15% in case domestic supplies fall short of the requirement.
However, the power plants turned a deaf ear to the plea, as they have significantly curtailed their purchases in view of the high coal prices in the international market.
Notably, the state-run plants have reported nil imports for the fifth consecutive month in Oct’21, as per the data provided by the power ministry. In fact, only Tamil Nadu Electricity Board (TANGEDCO) has brought imported fuel under this category of plants in the current fiscal.
Overall imported coal taken by plants for blending has fallen 23% y-o-y to 5.05 mn t during Apr-Oct’21, thereby adding more pressure on domestic supplies to meet the shortfall.
Keeping in mind the peak summer season next year, the power producers are expected to respond to the government’s call by returning to imports in order to maintain adequate stock levels.
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