Govt Urges States to Import Coal for Blending Up To 10% to Meet Rising Power Demand

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As the power demand expected to rise, Union Power Minister R K Singh on Wednesday urged states to import coal for blending purpose up to 10 per cent to ensure adequate coal stocks for uninterrupted power supply and said ‘tolling facility’ will be allowed up to 25 per cent of linkage coal.

Chairing a meeting to review ICB plants, import of coal for blending and coal stock position, Union Minister of Power and New and Renewable Energy R K Singh said this would enable states to optimally utilise their linkage coal in the plants nearer to the mines as it would be easier to transmit electricity instead of coal transport to far off states.

The tolling facility allows the utilisation of linkage coal of a state power generating station by any independent private power producer (IPP). The independent power producer can then produce power and supply it to the state which originally has the coal linkage.

The power ministry has also said recommended that all gencos should endeavour to import coal for blending up to 10 per cent.

“Principal secretaries and senior officials from states, independent power producers and representatives of ICB plants attended the meeting. Union Power Secretary Alok Kumar, Additional Secretary Vivek Kumar Devangan and CMDs of Power CPSEs were also present in the meeting held yesterday (Tuesday). The meeting was held in the wake of rising power demand,” the power ministry said in a statement on Wednesday.

After reviewing the operations of imported coal-based (ICB) plants, Singh directed all the procurer states to ensure that all ICB plants are operational at fair and reasonable tariffs. It was decided to resolve all the operational issues in ICB plants and make them fully functional.

“Keeping in view the rapidly increasing demand for power, it was recommended that all Gencos should endeavor to import coal for blending up to 10 percent. State-wise and Genco-wise targets were fixed and it was urged to ensure delivery of coal for blending purpose before the onset of monsoon as domestic coal supply gets affected during rainy season,” it added.

The country is likely to face more power cuts this year as utilities’ coal inventories are at the lowest pre-summer levels in at least nine years and electricity demand is expected to rise at the fastest pace in at least 38 years, as per a Reuters’ report quoting analysts.

Power cuts could stifle industrial activity in India, just when economic activity is starting to recover after months of COVID-19-induced lockdowns.

“The problem is, even after Coal India and the coal ministry kept asking power plants to stock up, the utilities kept reducing their inventories,” the report quoted Rajiv Agarwal, secretary-general of the Indian Captive Power Producers Association, as saying.

It added that the shortage of electricity as a percentage of demand has shot up to 1.4 per cent over the last week, higher than the 1 per cent deficit in October, when India last faced a serious coal shortage, and the 0.5 per cent shortfall in March.

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