Centre allows power utilities to import 10% of coal

In a bid to help states tide over the acute coal crisis grappling the country, the Centre has allowed power utilities using domestic coal to import 10 per cent of their coal.

The move is said to give a much-required boost to coal-fired thermal plants in the country which currently have just four days’ worth of fuel.

“We have allowed that they (power generators) use imported coal for blending up to 10 per cent,” Indian Express quoted an official of the Power Ministry as saying.

“Normally it takes 20-25 days (to get imported coal), but if there are some ships on the move and generators can contact them and get it earlier also, potentially in seven days,” the official added.

The official said even though the coal will be bought at a raised price from the international market, the blending would only lead to a 20-22 paise per unit (kilowatt-hour) rise in power tariff.

Also read: Coal stocks down to 3.5 days in TN’s thermal units, wind comes to the rescue

Thermal utilities could sell the power on exchanges or fix a higher rate with buyers under power purchase agreements (PPAs) to pass on the cost to discoms which are trying to meet power requirement of states by buying power on exchanges.

Purchase bids for power on the Day Ahead Market (DAM) on the India Energy Exchange (IEX) on October 12 stood at 430,778 MWh, much higher than 174,373 MWh last month. The average market clearing price rose from ₹2.35 per unit last month to ₹15.85 per unit.

The Centre on Tuesday lashed out at some states for effecting load shedding in specific areas under their domain and then selling power on exchanges at elevated prices.

“States not meeting the needs of its consumers but selling power in the power exchanges at a higher rate, the unallocated power of such states shall be withdrawn and allocated to other needy states,” the Power Ministry said in a statement, referencing to the 15 per cent of unallocated power at central generating stations.

The government also reprimanded Opposition-rules states for not lifting their quota of coal from the Coal India stockpile on time, leading to the shortfall in coal.

“There are states which didn’t prepare for the rise in power demand and instead indulged in creating panic,” a senior minister said on Tuesday.

Also read: Centre warns states against selling power at exchanges for higher price

“While most states didn’t prepare for the rise in power, some states like Jharkhand and Rajasthan didn’t exploit their own mines to meet the demands of plants. Instead, they announced rostering and went public with charges of a shortage,” the minister added.

Thermal power plants across the country have been running low on coal, prompting state governments to raise red flags on an imminent blackout situation.

The Centre, however, has said that there is no shortage of coal in India and that the “worst is over”. The government has attributed the depletion in coal inventory to the revival of the Indian economy, leading to a rise in power demand; rise in gas prices which raised the dependence on thermal power plants and the failure of states to gauge the coal demand and keep stock ready to meet future demands.

Coal India reportedly has increased its production in the last four days – from 1.57 million tonnes to 1.94 million tonnes per day and plans to scale it up further to 2 MT by the next week.