Power Ministry directs gencos to timely import coal for blending

New Delhi, May 18 The Power Ministry on Wednesday issued directions to all power generation companies (gencos), including independent power producers (IPPs), to timely import coal for blending purposes.

The ministry, in a letter written to state Power Principal Secretaries/Secretaries and all gencos, has said that keeping in view the likely less materialisation of coal supply from domestic sources as compared with the requirement to meet power demand, domestic coal will be allocated proportionately to all gencos based on likely availability from June 1. The balance requirement will need to be met from imported coal for blending purposes and target set for production in captive coal mines, it said.

The ministry also said that if the orders for import of coal for blending are not placed by gencos by May 31, and if the imported coal for blending purpose does not start arriving at the power plants by June 15, all the defaulter gencos would have to import coal for blending purpose to the extent of 15 per cent (in order to meet shortfall of imported coal for blending purpose in Quarter 1 i.e. April-June 2022) in the remaining period up to October 31.

It noted that not much blending has taken place in April and May 2022, and the power plants (who have not yet started blending by imported coal) will ensure that they blend coal at the rate of 15 per cent up to October 2022 and thereafter at the rate of 10 per cent from November 2022 to March 2023.

If blending with domestic coal is not started by June 15, then the domestic allocation of the concerned defaulter thermal power plants will be further reduced by 5 per cent. Accordingly, revised allocation of domestic coal for the month of July onwards will be conveyed based on the above methodology.

All gencos have been advised to ensure adequate stocks at their power plants for smooth operation until October 2022. The ministry has directed that the imported coal based plants should run and the state should import coal for blending, as in the previous years.

The ministry had issued directions u/s 11 of the Electricity Act that all the imported coal based plants start running and most of them have started running.

However, the import by states of coal for blending is not satisfactory. In 2018-19 a total of 21.4 million tonnes of coal were imported for blending. In 2019-20, the total import for blending was 23.8 million tonnes whereas in 2021-22, it was only 8.3 million tonnes. This is the cause of the stress in the availability of coal.

On December 7, 2021, the ministry had issued an advisory to all domestic coal-based power plants to import coal to meet their requirements by blending with imported coal to the extent of 4 per cent by state gencos and IPPs. It had issued the revised advisory on April 28 for importing coal for blending purpose to meet the requirement at 10 per cent of the total requirement by October 31.

The requirement for blending for each genco and IPPs at 10 per cent was also intimated and it was advised to place the awards for import of coal (for blending) by May 31, in order to ensure that 50 per cent quantity is received by June 30, 40 per cent by August 31 and 10 per cent quantity by October this year.