Power Ministry directs plants to continue importing coal for blending till June 2024

The Power Ministry on Monday advised all the coal-fired thermal power plants (TPPs) to continue importing coal at 6 per cent for blending in a bid to prepare for the upcoming peak demand season.

This is in continuation of its October 2023 order for blending of imported coal at 6 per cent (by weight) till March 2024.

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The Ministry said that it has reviewed the power supply scenario in the country and according to the projections, India’s peak demand is likely to reach up to 250 gigawatts (GW) during the summer season (April-June 2024). In 2023, the peak power demand rose to 243 GW during September.

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It also observed that despite an increase in loading of domestic coal rakes, the supplies of domestic coal will remain constrained due to various logistical issues associated with the railway network.

“In order to meet the power demand during the crucial summer months and to ensure uninterrupted power supply across the country, adequate coal reserves in domestic coal-based (DCB) plants need to be maintained by all the Central/ State Gencos and independent power producers (IPPs). The Ministry of Power has, therefore, decided to extend the advisory dated October 25, 2023 till June 2024,” the Ministry said.

Accordingly, all the Gencos are to firm up their imported coal contracts for ensuring supplies till June 2024. Further, Gencos must also continuously review the stock positions of their DCB plants and opt for blending as per requirements so that adequate coal stocks are maintained at the TPP level, it added.

Energy demand

According to JM Financial, India’s energy demand and peak power rose 7.6 per cent Y-o-Y to 1,225 billion units (BU) and 12.7 per cent Y-o-Y to 243 GW, respectively, during April-December (9M) FY24.

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As per India Ratings & research (Ind-Ra), the peak demand increased 11 per cent Y-o-Y in H1 FY24, attributed to the improved economic activity, rising heat and poor monsoons. However, coal supply has improved during the current fiscal and led to a moderation in the peak demand deficit to 0.08 per cent during 9MFY24 (FY23: 4 per cent).

Ind-Ra expects thermal plant load factor, or capacity utilisation, to be around 68 per cent during FY24 and FY25 with a 5-6 per cent annual increase in power demand. Thermal continues to be the major source of power for the country with around 75 per cent share in the generation, followed by renewables at about 23 per cent during 9M FY24.

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