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Despite a spike in electricity demand between April 2022 and January 2023, the supplies of domestic coal have not been commensurate with the requirement, and therefore, the power ministry has asked Central as well as state generation companies (Gencos) to import coal through transparent and competitive procurement for blending, to ensure sufficient coal stocks at their plants for smooth operations till September 2023.

According to official sources, the power ministry gave these directions to gencos last month.

NTPC imported 13.87 million tonnes of coal in 2022-23, out of which 13.56 million tonnes has been imported from Indonesia while 0.319 million tonnes has been imported from Australia.

Thermal power plants have been importing coal for blending from 2009 onwards and these imports varied between a peak of 48.8 million tonnes in 2015-16 to 23.8 million tonnes in 2019-20.

In 2020, the power ministry advised states to reduce imports for blending. As a result, imports declined to 8.1 million tonnes in 2021-22, sources have said.

Post-Covid, the power demand increased rapidly. At the same time, there was less generation from imported coal-based plants due to high prices of imported coal, while domestic coal supplies were hit due to heavy rain.

As a result, coal stocks at power plants depleted drastically from September, 2021 onwards. Subsequently, in December 2021, the power ministry advised state gencos and independent power producers (IPPs) to import coal at 4 per cent (by weight) and central gencos at 10 per cent (by weight) of their requirement during 2022-23.

Subsequently, in April, 2022 coal consumption in power plants grew by about 12 per cent as compared to April 2021, leading to depletion of coal stock in domestic coal based plants.

In view of the high demand and depletion of coal stock, the power ministry once again advised states and IPPs in April 2022 to import coal at 10 per cent (by weight) of their requirements in order to maintain sufficient coal stock during the monsoon season.

The gap between daily coal consumption and daily arrival of domestic coal ranged from 2.21 lakh tonnes to 0.5 lakh tonnes between April 2022 and January 2023, sources said.

If there would have been no import for blending purposes, the coal stock available at domestic coal-based plants would have reduced to zero by September 2022. The average depletion was about 1.6 lakh tonnes per day during the first half of 2022-23, they added further.

Subsequently, with coal stocks showing signs of recovery, the power ministry advised gencos in August last year to take a decision regarding blending at their level, taking into account the overall supply and stock position with continuous monitoring of stock levels.