You are here: Home » Economy & Policy » News
Business Standard

India sets end-June as coal import target as power crisis mounts

The move can put pressure on the global prices of coal as the utilities rush to avoid a repeat of the electricity crisis in April

coal industry | Coal imports | power crisis

Reuters  |  NEW DELHI 


By Sudarshan Varadhan

NEW DELHI (Reuters) -India has asked state and private sector utilities to ensure delivery of 19 million tonnes of coal from overseas by end-June, according to a letter, reflecting an urgency to secure supplies in a pricey market amid increasing blackouts.

The move, which marks the first time the world's second largest coal importer is issuing timelines for imports, can put pressure on the global prices of coal as the utilities rush to avoid a repeat of the electricity crisis in April.

If the timelines are adhered to, the imports by the states and private utilities over the next five months for blending with domestic coal will surpass annual imports by the entities in at least six years.

An unrelenting heatwave pushed electricity demand to a record high in April, leading to the worst in over six years and forcing India to go back on a policy to cut down .

The federal government has asked state government-owned utilities to import over 22 million tonnes of coal and private power plants to import 15.94 million tonnes, the said in a letter reviewed by Reuters.

The asked all utilities to ensure delivery of 50% of the allocated quantity by June 30, another 40% by end-August and the remaining 10% by the end of October, according to the letter to top officials at state energy departments and heads of private power plants.

State government-run utilities have not imported for blending more than 7.1 million tonnes and private companies not more than 13.1 million tonnes since at least the year ending March 2017. Data predating year ended March 2017 is not available.

The federal power ministry did not immediately respond to a request seeking comment.

Utilities are not obligated to honour the federal government directives, but two government officials who attended meetings related to rising power demand said that states were warned of blackouts if the suggested quantities were not imported.

States and private companies "must import" coal and "ensure continuous power supply in the respective states", the letter read.

"To ensure minimum required coal stocks in power plants before onset of monsoon, it is necessary that placement of awards for importing coal for blending purpose is completed by 31.5.2022," the ministry said in the letter dated April 28.

Private companies including Adani Power, Tata Power, Reliance Power, Jindal Steel and Power, Torrent Power and Sembcorp have been given import targets, the letter showed.

The companies did not immediately respond to requests for comment.

"All the State generation companies and independent power plants must submit weekly management information system report by every Friday to the Central Electricity Authority (CEA) and the Ministry of Power about port wise indents placed, arrival and delivery of imported coal plant wise," the letter read.

(Reporting by Sudarshan Varadhan; Editing by Muralikumar Anantharaman)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, May 04 2022. 09:35 IST