CIL to import fuel for utilities use as power shortages loom

31 May 2022 CW Team

State-run Coal India Limited (CIL), the world's largest coal miner, will import the fuel for use by utilities as shortages raise concerns about renewed power outages.

It would be the first time since 2015 that Coal India has imported the fuel, emphasising efforts by state and federal officials to stock up to avoid a repetition of April, when India encountered its worst power cuts in more than six years.

CIL would import coal for blending on a government-to-government (G2G) basis and supply it 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, and top Central and state energy officials, including the CIL's coal secretary and the chairman.

India is likely to face a wider coal shortage during the third quarter (Q3) of 2022 due to anticipations of higher electricity demand, stoking fears of widespread power outages.

The power ministry said in the letter the decision was taken after almost all states indicated that multiple coal import tenders by states would lead to a mess and sought centralised procurement through CIL.

India stepped up pressure on utilities to raise imports to blend with local coal in recent days, warning of cuts to the supply of domestically mined coal if power plants did not create coal inventories via imports.

But the power ministry on Saturday requested states to suspend tenders that are under process.

The ministry said that the tenders under process by state generators and IPPs for importing coal for blending may be kept in suspension to await the cost discovery by Coal India via the G2G route to procure coal at the least possible rates.

Coal inventories at power plants have dropped by nearly 13% since April to the lowest pre-summer levels in years.

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Also read: Coal production hikes to 34 mt till the first half of May

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