As shortages raise concerns about renewed power outages, the world’s largest coal miner, state-run Coal India will import the fuel for use by utilities, a power ministry letter seen by Reuters showed on Saturday,
Coal India had last imported fuel in 2015.
“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),” the Power Ministry said in the letter dated May 28.
The letter was sent to all utilities, top federal and state energy officials including the federal coal secretary and the chairman of Coal India.
India is expected to face a wider coal shortage during the third quarter of 2022 due to expectations of higher electricity demand, stoking fears of widespread power outages. The plan to import coal highlights the efforts by state and federal officials to stock up to avoid a repeat of April, when India faced its worst power cuts in more than six years.
The power ministry said in the letter the decision was taken after nearly all states suggested that multiple coal import tenders by states would lead to a confusion and sought centralised procurement through Coal India.
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% since April to the lowest pre-summer levels in years.
