The Ministry of Power (MoP) directed state-run miner Coal India Ltd (CIL) to execute coal imports via centralised procurement for power plants to meet the surplus demand.
The latest effort catalyses the urgent call by the ministry to ensure adequate coal inventory at plants before the monsoon begins as supplies from domestic sources are inadequate.
MoP had initially directed the power generating companies (gencos) to import at least 10% of their coal requirement for blending purposes. However, because of the incapacitation faced by these gencos amid rising import prices via tenders, it turned towards CIL to act as as an intermediate measure.
CIL accounts for almost 80% of India’s overall coal production. But, it is not the first time the company has looked out for imports for recovery.
Earlier, in FY2015-16 (FY16), the company had supplied imported coal to the power plants under the provision of the fuel supply agreements (FSAs). As per company data, import order to the tune of 0.35 mnt was delivered during April-September 2015.
Action plan
Upon MoP’s directive, CIL would initiate coal imports and supply the same to the power plants along with domestic coal and raise payments against a composite billing. This arrangement would assist the gencos in procuring coal at a uniform price derived from centralised procurement.
The gencos, which had already placed orders for imports, were advised to keep the process on hold and access price discovery by CIL so as to procure coal at the least possible rates.
Besides, MoP has sought the requirement of coal imports from the gencos for FY23 taking into account the quantity that have already been awarded. This include separate quotation for requirement up to September 2022.
Based on the requirement, CIL would make arrangements for imports and ensure delivery of first consignment by the end of September 2022 on an urgent basis.
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