Govt asks power plants to blend 10% imported coal to step up supply

Govt asks power plants to blend 10% imported coal to step up supply

The government has asked thermal power units to restart the discontinued practice of blending 10% imported coal on concerns over depleting stock, while the coal and power ministries will explore ways to further enhance supplies, sources told ET after high-profile deliberations on Tuesday.

Secretaries of coal and power ministries at a review told the Prime Minister’s Office (PMO) that coal dispatches to power plants have exceeded daily consumption. Both the ministries will also work on improving coal logistics, as Coal India has stocks of about 40 million tonnes at its mines.

Sources said coal dispatches to thermal power plants rose to 1.95 million tonnes on October 11 against a consumption of 1.9 million tonnes. Dispatches are expected to increase to 2 million tonnes a day and the situation is expected to improve soon.

Outages Continued

“The Prime Minister’s Office reviewed the coal stock position at thermal power plants and the measures being taken by the coal and power ministries to contain the crisis as electricity consumption is expected to remain high for a few more days,” an official said.

This came after several states complained of low coal stocks, with some even resorting to load-shedding over the last few days.

Outages continued in Punjab, Uttar Pradesh and Rajasthan, though the situation was better than on Monday.

The power ministry earlier on Tuesday directed thermal power plants to blend 10% imported coal, citing fast-depleting coal inventories at power stations.

All thermal power plants can accommodate nearly 20% imported coal, but the practice was stopped around 4-5 years ago due to increased availability of domestic coal and less generation capacity utilisation.

A senior government official told ET that the cost of imported coal can be passed on to consumers, but electricity generating companies said importing coal at prevailing high prices and at short notice was not possible.

Also, the power stations need approval from discoms to import coal for blending.

Coal imported from Indonesia is at a historic high of $160 per tonne, from about $50 a tonne in March. This is nearly five times the price of domestic coal.


Sources in the Gujarat government told ET that the state was working to get three imported coal-based plants to start generating power soon.

The state has three imported coal plants run by Tata Power (4,000 mw), Adani Power (4,620 mw) and Essar Power (1,200 mw) which are currently non-operational due to high fuel prices.

“We are buying a substantial amount of power from the exchange at around Rs 13 per unit. We expect to reach a consensus in 2-3 days. If this happens, prices on exchange will reduce too,” a source said.

The power ministry also issued guidelines to states asking them to not divert electricity allocated by the Centre from its share of coal-based power stations of central Public Sector Undertakings. The ministry asked states not to sell this electricity on power exchanges.

Normally, 15% of the capacity of central power generating stations is reserved as “unallocated” quota for the Centre, which is subsequently allocated to states as per a fixed formula.

The coal and power ministries have both said that coal stocks are likely to rise as supply stabilises and electricity demand wanes with favourable weather.

Average power prices on spot markets for delivery on Wednesday dropped by ₹2 per unit but remains high at ₹13.13 per unit.

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