Coal India To Import Fuel For First Time In Years Amid Concerns Of Power Cuts: Report

India may face a wider coal shortage during the third quarter of 2022 as a result of higher electricity demand raising concerns of widespread power outages.

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New Delhi: The government-owned Coal India will import coal for use by utilities amid looming power outages because of shortages, as per the news agency Reuters report. A letter by the Power Ministry dated May 28 accessed by the news agency shows that the world's largest coal miner for the first time since 2015 would import the fuel in an attempt to stock up and avoid a repeat of April.

The move highlights the efforts by state and central officials to avoid a situation in April when the country faced its worst power cuts in more than six years.

"Coal India would import coal for blending on government-to-government (G2G) basis and supply ... to thermal power plants of state generators and independent power producers (IPPs)," said the Power Ministry.

The letter has been sent across to all utilities, and top central and state energy officials including the coal secretary and the Chairman of Coal India.

India battling coal shortage

India may face a wider coal shortage during the third quarter of 2022 as a result of higher electricity demand raising concerns of widespread power outages.

The decision was taken after nearly all states suggested that multiple coal import tenders by states would lead to confusion and sought centralised procurement through Coal India, according to the Power Ministry letter.

Recently, India intensified measures to ensure that utilities increase imports to blend with local coal and warned of cuts to the supply of domestically mined coal if power plants did not build up coal inventories through imports.

However, the Power Ministry on Saturday asked states to suspend tenders that are "under process".

"The tenders under process by state generators and IPPs for importing coal for blending may be kept in abeyance to await the price discovery by Coal India through G2G route, so as to procure coal at least possible rates," the ministry said.

Coal inventories at power plants have declined by about 13 per cent since April to the lowest pre-summer levels in years.