Three Industrial states to import 10.5 mt of coal to curb power cuts

01 Apr 2022

Maharashtra, Tamil Nadu and Gujarat, the country’s three most industrialised states, plan to import 10.5 million tonnes (mt) of coal in some months to control widespread power cuts.

Utilities' coal inventories are at the lowest pre-summer levels in at least nine years, and electricity demand is increasing in at least 38 years.

According to the officials, Maharashtra plans to import 8 mt of coal for blending purposes, while Gujarat will place orders for 1 mt next week.

The Chairman of the state government-run utility said the state was targeting to import 20% of its coal requirements and had already placed orders to import 1.5 mt.

This move could lead to a further increase in global prices of coal, which are already trading at record-high due to a supply crunch following the European Commission's decision to ban coal imports from Russia after it invaded Ukraine.

Earlier, India asked the state government-run utilities to import 4% of their coal requirements for blending purposes but later suggested that imports be boosted to 10% of the quantity needed to address the rising power demand.

National Thermal Power Corporation (NTPC) Limited plans to boost coal imports to the highest level in eight years.

Many states, including Andhra Pradesh, Maharashtra, Haryana, Punjab and Rajasthan, are already facing power cuts.

Coal utilities in Tamil Nadu have less than two days of rolling coal stock left on average. However, the coal power plants in Maharashtra and Gujarat have about five days of inventory left on average. The federal guidelines recommend that states should have at least 24 days of coal inventory.

The officials have also decided to invoke an emergency clause in India's electricity law to allow the idled power plants designed to run on imported coal to pass on higher costs to the distribution companies.

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