The Power Ministry has directed domestic coal based (DCB) plants to import 4 per cent coal by weight till March 2024 as the gap between consumption and receipt of the crucial commodity at such units surpassed 6 million tonnes (MT) in August 2023.
Besides, it has also mandated that the shortfall in domestic coal supply will be shared with all Gencos on a pro rata basis as against a requirement of 404 million tonnes (MT) for H2 FY24, domestic availability of only 397 MT is possible.
Power demand has been hovering above 200 gigawatts (GW) in almost all of August 2023, and touched the highest ever peak demand of 236.6 GW, which is around 21 per cent higher than the demand in August 2022, Power Ministry said.
In light of the continuous high gap between receipt of domestic coal and total consumption at domestic cold, based plants, a realistic assessment of availability of coal at DCB plants from all sources has been done, it added.
“Accordingly, after consultation with the Central Electricity Authority (CEA), it has been decided to extend the advisory of January 9, 2023 by modifying the mandatory blending to 4 per cent (by weight) for the remaining period off at FY24,” the Ministry said.
Central and state Gencos as well as independent power producers (IPPs) are directed to take necessary action, or import coal at 4 per cent through a transparent, competitive bidding process until March 31, 2024, so as to have comfortable coal stocks at their power plants for smooth operations. Further, the shortfall in domestic coal supply will be shared with all Gencos on a pro rata basis.
“While determining the share of domestic coal to be supplied to the Gencos from Coal India/ SCCL, it will be ensured that their respective pithead stations are provided with hundred percent of their domestic call requirement. In case of adequate availability of domestic coal, Gencos should avoid using imported coal at their pithead stations,” it added.
Need for imports
In light of the continuous high gap between receipt of domestic coal and total consumption at domestic cold, based plants, a realistic assessment of availability of coal at DCB plants from all sources has been done, the Ministry said.
It has been noted that, despite the increase in domestic cold supply during Q1 FY24, it fell short of meeting the requirement during August the gap between call consumption at DCB plans and receipt of domestic coal has been about 2 lakh tonnes per day. The gap was partly made up with an Imports without which coal stocks would have declined to critical levels, it added.
“Though Railways is making progress in resolving infrastructure issues, yet there are some bottlenecks, which may take some more time to resolve. Grid India has projected. Continuation of elevated power demand throughout the current fiscal year in line with this the central electricity authority (CEA) has estimated a domestic coal requirement of 404 MT during H2 FY24. However, due to logistical constraints associated with railways network, the availability of rakes during H2 FY24 will be sufficient for loading and dispatching only 397 MT of domestic coal,” it added.
In light of the scenario where power demand is increasing and enhancement of coal supply is not commensurate with the requirement, the need has arisen to continue use of imported coal for blending, Power Ministry pointed out.
India’s electricity demand grew by 21 per cent Y-o-Y in August 2023 as the world’s third largest energy guzzler’s power consumption rose during the month aided by rising heat and humidity levels, which led to an increase in the number of cooling hours.
In April-June, the power demand grew 7.8 per cent Y-o-Y. The demand in FY23 was 6.3 per cent more compared to FY22 and the demand in FY22 was 6.7 per cent more than the demand in FY21.
At the same time, DCB power plants are facing coal shortage, which has hit around 6.3 million tonnes (MT) at the end of August 2023.