Coal India to import for first time in years as power shortages loom
Coal at a railway
State-runCoalIndia, the world's largestcoalminer, will import the fuel for use by utilities, a power ministry letter seen by Reuters showed on Saturday, as shortages raise concerns about renewed power outages.
It would be the first time since 2015 thatCoalIndiahas imported the fuel, highlighting efforts by state and federal officials to stock up to avoid a repeat of April, whenIndiafaced its worst power cuts in more than six years.
"CoalIndiawould importcoalfor blending on government-to-government (G2G) basis and supply ... to thermal power plants of state generators and independent power producers (IPPs)," the federal Power Ministry said in the letter dated May 28.
The letter was sent to all utilities, top federal and state energy officials including the federalcoalsecretary and the chairman ofCoalIndia.
Indiais expected to face a widercoalshortage during the third quarter of 2022 due to expectations of higher electricity demand, stoking fears of widespread power outages.
The power ministry said in the letter the decision was taken after nearly all states suggested that multiplecoalimport tenders by states would lead to a confusion and sought centralised procurement throughCoalIndia.
Indiastepped up pressure on utilities to increase imports to blend with localcoalin recent days, warning of cuts to the supply of domestically minedcoalif power plants did not build upcoalinventories through imports.
But the power ministry on Saturday asked states to suspend tenders that are "under process".
"The tenders under process by state generators and IPPs for importingcoalfor blending may be kept in abeyance to await the price discovery byCoalIndiathrough G2G route, so as to procurecoalat least possible rates," the ministry said.
Coalinventories at power plants have declined by about 13% since April to the lowest pre-summer levels in years.