Start coal imports: PowerMin to states

The Centre has asked states to immediately start importing coal to meet power requirements and to lift coal by road as failure to do so may lead to shortages in such states during the monsoon.

Power Minister RK Singh has written to chief ministers of all states which have not started the process of coal import, according to a government release.

In separate letters to Haryana, Uttar Pradesh, Karnataka and West Bengal, Singh “expressed concern that tender process for coal import has either not started or not completed in these states,” said the release. He has also asked states to lift the entire quantity of coal offered to them by coal companies through RCR (road-cum-rail) mode to build coal stocks. Earlier, government sources noted that an insufficient number of railway rakes available for transportation of coal had contributed to the shortage of coal at power houses.

Singh told states that any coal allocated to a state for delivery by RCR mode that is not lifted would be reallocated to other needy states. He noted that states that fail either to augment stocks through imports or fail to lift their entire allocation of coal may face shortage in the monsoon season.

In December, the Centre permitted all states to import coal up to 10 per cent of requirements to augment low inventories of the dry fuel at thermal power plants. Low coal stocks at thermal plants led to power outages from April across most states in north India and several in southern India as soaring temperatures raised the demand for power, even as a vital portion of imported coal-based capacity was not producing power due to high global coal prices.

Concerns about coal stocks at plants remain even as the power crisis has eased over the past week, with the market-clearing price for power on the Day Ahead Market at the India Energy Exchange (IEX) coming down to Rs 5.2 per unit for supply on May 18 from Rs 12 per unit (the ceiling price) at the beginning of the month. A total of 90 thermal power plants out of the 165 operation thermal power plants had critically low levels of coal stock on May 17.

Earlier than usual pre-monsoon rains in southern India and the heavy downpour across the coastal states due to the Cyclone Asnani have led to lower power demand in southern states, according to IEX. There has also been an increase in hydropower and wind power generation in southern states — including Karnataka, Tamil Nadu, Telangana and Andhra Pradesh — which has contributed to lower purchases from such states on the exchange.

Concerns over the coal stock situation persist as experts have noted that low coal stocks going into the monsoon season may spell a worse power crisis later in the year because coal stocks at power plants often decline during the season as both production and transportation of coal are negatively impacted by rains.

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