India allows power plants to blend imported coal with local grade
FILE PHOTO: Indian trucks wait for their turn to unload imported coal at a stockyard at a coal-fired thermal power plant belonging to Essar Power in Salaya, some 400km from Ahmedabad, on October 4, 2016.
(SAM PANTHAKY/AFP via Getty Images)
INDIA has allowed power producers to expedite imports of coal to use for up to 10 per cent of blends with the domestic grade to meet increased power demand in a move that could push up already high global prices.
Asia’s third-largest economy is facing large-scale outages as several power plants have low coal inventories amid a sharp spike in global energy prices.
So far power plants that use local coal import little.
The note said supply from state-run Coal India Ltd is not commensurate with the surge in electricity consumption, leading to a change in government policy on coal imports.
India’s power demand has been rising with the revival of the economy after the lifting of Covid 19-induced restrictions.
India has also warned states that federal companies will curb their power supplies if they are found selling electricity on power exchanges to cash in on surging prices.
India is the world’s second-largest coal producer, with the world’s fourth-largest reserves.
Supply shortage of coal has forced north Indian states like Bihar, Rajasthan and Jharkhand to undertake power cuts for up to 14 hours a day.
Over half of India’s 135 coal-fired power plants, which supply around 70 per cent of the country’s electricity, have fuel stocks that will last three days or less.
Federal government-controlled power producers such as NTPC Ltd and Damodar Valley Corp, sign long-term power purchase agreements with distribution companies for the sale of most of their power output.
But 15 per cent of their power is controlled by the federal government, which sells this so-called “unallocated” power to the states.
Reports said that some states, instead of supplying electricity to their consumers, are imposing rolling power cuts and selling power at higher prices to energy exchanges, the ministry said in a statement, without giving details.
The chief minister of Andhra Pradesh, Y S Jagan Mohan Reddy, wrote to Prime Minister Narendra Modi to complain about the rising prices on power exchanges.
He said prices had trebled to 15 rupees for a unit of power from mid-September to Oct. 8.
On Tuesday (12), the Bangalore Electricity Supply Company Limited (BESCOM) announced staggered power cuts across the city, with most of the cuts scheduled for over ninety minutes in the afternoon.
BESCOM managing director Rajendra Cholan said Bangaluru, home to the technology operations of hundreds of global companies, including Amazon and Infosys, has sufficient power and a scheduled outage is for laying underground power cables in the parts of the city.
Other southern states, such as Andhra Pradesh and Kerala, have warned that they may have to have power cuts if the shortages continue.
New Delhi chief minister Arvind Kejriwal on Saturday warned of a power crisis because of the coal shortage that has already brought electricity cuts in some eastern and northern states.