Government asks Coal India to be ready to import 12mn tonnes of coal for power utilities

According to industry experts, the government is making all efforts to build up stock of coal to avoid the reoccurrence of power outrages which happened in April on account of shortage of the fossil fuel.

Representational image only. | Photo Credit: Reuters

The government has directed the State-owned Coal India Limited (CIL) to be prepared to import 12 million tonnes (MT) of coal for power utilities for the next 13 months.

The State power generation companies (gencos) and independent power producers have sought time till Saturday afternoon to figure out the quantity of coal they require and the import orders would be placed by Coal India very soon, a source said. It would be the first time since 2015 that the maharatna firm imports the dry fuel.

"Government of India has mandated Coal India to be ready to import 12 million tonnes of coal for July this year to July 2023," the source added. A query sent to the company in this regard did not elicit any immediate response. According to industry experts, the government is making all efforts to build up stock of coal to avoid the reoccurrence of power outrages which happened in April on account of shortage of the fossil fuel.

On May 18, the Ministry of Power had warned that if orders for coal imports are not placed by May 31, 2022 and the imported fuel does not start arriving at power plants by June 15, the defaulter gencos will have to increase their imports to the extent of 15%.

Further, if blending with domestic coal is not started by June 15, then the domestic allocation of the defaulter's thermal power plants concerned will be further reduced by 5%, the Ministry had said in a letter to the State governments and power gencos, including independent power producers (IPPs).

Watch | India on the brink of a power crisis due to coal shortage

In April, Coal Secretary A. K. Jain had attributed the low coal stocks at power plants to several factors such as heightened power demand due to the boom in the economy post-COVID-19, early arrival of summer, rise in the price of gas and imported coal, and sharp fall in electricity generation by coastal thermal power plants.

In April, several parts of the country witnessed power outrages on account of coal shortages. He had said a lot of measures are already under way to enhance the total power supply in the country. “Gas-based power generation, which has fallen drastically in the country, has aggravated the crisis,” he said.