India: Imported coal-based power plants scale up output to 7-month high in March

Power plants designed to run on imported coal have reportedly scaled up their generation volume in Mar’22, thereby providing much-needed relief to the domestic coal-based plants amid soaring power demand.

As per data provided by the Ministry of Power, power generation from import-based plants surged 128% m-o-m to 3,265 million units (MU) in March as against 1,431 MU in Feb.

Output was boosted by the return of 1,200 mega-watt (MW) capacity plant owned by IL & FS Tamil Nadu Power. However, the overall volume in March remain significantly lower than the levels seen at the beginning of FY’22, as five out of the 14 such plants still remain out of operation.

Situation remains critical

Import-based plants have faced operational hurdles due to soaring prices in the international market.

Evidently, several plants have either shut their operations or are working at reduced capacity in the aftermath of soaring prices. In fact, total generation by such plants have reduced to half at 39,817 MU during FY’22 compared to 79,545 MU in FY’21.

Considering the elevated demand, the curtailment has kept domestic coal supplies in a tight spot as the domestic-coal based plants had to compensate for the loss.

To worsen the situation, coal inventory at the plants has started to decline at a faster rate than usual due to soaring summer time demand at a time coal supplies are faltering. As on 12 April, the stock level was assessed at 23.38 mnt as against 25 mnt seen over the past three months.

Power Ministry takes guard

Reviewing the condition of the import-based plants, the power ministry has directed state governments to ensure that these plants are operational at fair and reasonable tariffs by resolving their issues.

It was also recommended to all the generating companies (gencos) to import coal for blending up to 10% so as to ensure ample availability before onset of monsoon.

Moreover, the government has made provision of tolling facility for certain state-run power gencos so that they can replace 25% percent of linkage coal by procuring from mines located near to the plants, in order to avoid long-distance coal transportation.