Coal India will start to import, as fuel shortage hits home: Report

Coal India, under the Central Government, will start import the fuel for use by utilities, news agency Reuters quoted a letter from the power ministry. 

This comes at a time amid fears of shortage of the fuel. 

The report noted that it would be the first time since 2015 that Coal India has imported the fuel, highlighting efforts by state and central officials to stock up to avoid a repeat of April, when India faced its worst power cuts in more than six years. 

"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 letter claimed, according to the report.

The union power ministry has asked reticent power generating companies, both state and private-owned, to better fix up and import the necessary coal from international markets within June to deal with the deficiency. 

The state government-owned utilities are to import 2.2 crore tonnes of coal while private power plants have to import nearly 1.6 crore tonnes.

About 70 per cent of electricity in India is from thermal energy produced primarily by burning domestic coal that is mixed with imported coal.

One of the primary reasons for the critically low coal stock at many power plants presently has been because power companies, strapped of cash particularly since COVID-19, have been dragging their feet from importing coal from the international markets, where the prices have shot up dramatically in recent times.

The domestic situation has been compounded by international developments the post-Covid logjam in global shipping and supply chain has seen international coal prices soaring high many Indian power distribution companies, especially state DISCOMs of Maharashtra, Jharkhand etc., are in a bad state financially to buy them at such prices.

For example, all state-owned power plants and coal-based power plants in Tamil Nadu, Karnataka, Andhra Pradesh, West Bengal and Rajasthan are facing critical shortage of coal.

In fact, Rajasthan faced a shortage of a whopping 28 crore units in April, resulting in power cuts lasting as long as 8-9 hours across the Congress-ruled state. The situation could just get worse before it gets better.