10 Jul 2018
Government-run thermal power plants must import coal to compensate for domestic coal shortages, the Central Electricity Authority of India (CEA) has said in response to a power ministry directive to take stock of coal supply.
Though the CEA, which acts as a power advisor to the government, has concluded India needs to buy only 20 MT of coal from abroad, the assessment potentially undermines the government’s plans to eventually stop such imports.
CEA observed that the coal stock at power plants has depleted to 15.3 MT in June 2018 — sufficient to power plants for an average of only 9 days compared with the normative level of 35.5 MT. It is the deficit of about 20 MT that CEA said must be imported.
The Narendra Modi government has repeatedly stressed India should look to eliminate coal imports. India imported about 80MT in FY16, but imports fell to 53MT in FY18 due to this push.
The power sector’s requirement for coal is estimated at 615 MT for FY19. State-run Coal India, the world’s second-biggest coal miner by production, has ratcheted up output by 15.2% in the first quarter of FY19, but has failed to keep pace with the spike in demand for coal due to summer and unavailability of power from shuttered hydro and gas based plants.
India’s power sector faces severe stress due to lack of coal linkage, unfriendly power purchase agreements and a shortage of railway rakes that supply coal. Ideally, all power plants connected to a coal block should have a stock of 30 days but has supplies that last for only nine days.