Power plants no longer need to blend imported, local coal

17 Aug 2022 CW Team

The union government has rolled back an emergency order that mandated power plants to import 10 per cent of their coal requirement and blend it with domestic supply. The withdrawal of the mandatory blending order indicates there are adequate stocks at power plants to meet the annual rise in coal demand post-monsoon, when electricity demand picks up. Data showed 31 million tonnes of coal stock, including 2.5 million tonnes of imported coal, at power stations, among the highest in August of any year. The coal blending order, issued on May 26 under Section 11 of the Electricity Act, mandated 10 per cent imported coal use and provided appropriate compensation to 32 GW of domestic coal-based power projects till March next year.

"The coal stock position in power plants has been reviewed periodically with the stakeholders, including Ministries of Coal and Railways. It has been decided to withdraw the aforesaid order dated 26th May 2022, with immediate effect," the order issued last week by the Power Ministry said.

"Imported coal purchased under the aforesaid directions, till the date of issuance of this letter, shall be utilized in accordance with the methodology given the subject order dated 26th May 2022," it added.

The power plants have placed large orders for imported coal. The National Thermal Power Corp (NTPC) and the Damodar Valley Corp (DVC) have placed close to 23 million tonnes of contracts for the fiscal, largely with Adani Enterprises. Coal India Ltd has ordered another 6 mt.

The coal ministry has also withdrawn another order issued on July 13 that said coal supplies of generation companies that did not adhere to the 10 per cent blending order would be reduced.

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