Government asks power generating companies to consider coal imports

The government late on Friday asked power generating companies to consider coal imports, citing critically low fuel stocks at projects with a capacity of 90 GW. Increased electricity demand coupled with less hydropower and wind generation has put pressure on coal-fired plants.

The high price of imported coal, limited gas availability for power plants and heavy rain in coal-producing areas have added to the woes. The extent of low coal stock at such a large power capacity is unprecedented.

Coal secretary Anil Jain told ET that Coal India has adequate stocks. However, there are logistical challenges related to despatches amid the record demand for power. The company is ramping up supplies and the situation will ease in 10-15 days when transportation issues are resolved.


Power secretary Alok Kumar said, as per an internal assessment, there will be continued pressure on coal-based thermal power plants for the next 15-20 days with dwindling support from hydropower and wind-generating stations amid high demand.

Country’s Peak Demand at Around 190 GW
Power companies said Coal India was supplying 225 railway rakes per day against the target of 280. Coal companies said power plants had cut generation from imported coal due to high prices.

The country’s peak demand is hovering at around 190 GW while the daily average consumption is 4,150 million units. It has an installed generation base of 390 GW, of which 209 GW is coal-based. Data available with the Central Electricity Authority (CEA) for August 24 showed of 82 GW under maintenance, a total 52 GW capacity was under forced outage.

The CEA communication late on Friday asking electricity generation units to "inform (email) the shortest possible time (days) in which imported coal may be procured and supplied to the plant" triggered anxiety. "This may please be accorded TOP PRIORITY," read the email.

Imported coal-based plants in the country are either under planned maintenance or forced outages since prices internationally have peaked at $70 a tonne. Dependent states such as Gujarat are resorting to costly spot purchases, raising exchange prices to as much as Rs 20 per unit.

Kumar said the situation is being monitored on a daily basis and there was no need to panic. The power ministry has asked 20 captive mines belonging to utilities such as NTPC, DVC and state power generating companies to ramp up production.

"Coal supplies are also likely to be moderated at power plants that have more than 14 days’ stock. We will give more supply to people who have three days’ stock," Kumar told ET.

"We have also asked NTPC to ramp up gas-based generation and requested CEA to explore coal import, in case nothing works out."

A power sector official said Coal India was not able to give crushed coal to power plants and supply the fuel till railways sidings because of rain. “The company is not able to load,” he said.

A Coal India official said power generation from imported coal is down by almost by a quarter in the financial year.

India consumes 965 million tonnes (MT) of coal, of which 235 MT is imported. Of the imports, 80 MT is thermal coal for power plants. Since imported coal prices have shot up, there is unprecedented pressure on domestic coal, said the official. August and September are difficult months for mining and the coal ministry had been asking power plants to stock up on the fuel beforehand.