For The First Time In Years, Coal India To Import Fuel Amid Power Cut Looms: Report

New Delhi: According to a Power Ministry letter seen by Reuters on Saturday, the government-owned Coal India, the world’s largest coal miner, will import the fuel for usage by utilities, as shortages raise concerns of new power disruptions.

Coal India will be importing the fuel for the first time since 2015, indicating attempts by state and government officials to stockpile in order to avoid a repetition of April, when India experienced its worst power outages in more than six years.

“Coal India would import coal for blending on government-to-government (G2G) basis and supply … to thermal power plants of state generators and independent power producers (IPPs),” the Power Ministry said in the letter dated May 28.

The letter was issued to all utilities, as well as top federal and state energy officials, including the Coal Secretary and Coal India’s Chairman.

Due to projections of rising electricity consumption, India is anticipated to confront a greater coal scarcity in the third quarter of 2022, sparking fears of widespread power disruptions.

The Power Ministry said in the letter the decision was taken after nearly all states suggested that multiple coal import tenders by states would lead to a confusion and sought centralised procurement through Coal India.

India stepped up pressure on utilities to increase imports to blend with local coal in recent days, warning of cuts to the supply of domestically mined coal if power plants did not build up coal inventories through imports.

However, on Saturday, the Power Ministry requested that states postpone tenders that are “in progress.”

“The tenders under process by state generators and IPPs for importing coal for blending may be kept in abeyance to await the price discovery by Coal India through G2G route, so as to procure coal at least possible rates,” the ministry said.

Coal inventories at power plants have declined by about 13 per cent since April to the lowest pre-summer levels in years.

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