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India Boosts Coal Output as Heatwave Threatens Power Supply

Imports by India’s states and private utilities over the next five months for blending with domestic coal are likely to be the highest in six years


A coal-fired power plant
Chimneys of a coal-fired power plant are pictured in New Delhi, on July 20, 2017. File photo: Adnan Abidi, Reuters.

 

India is boosting coal production amid urgency to secure supplies because of increasing blackouts as a heatwave strikes South Asia.

The move is expected to apply pressure to global prices of coal as Indian utilities rush to avoid a repeat of April’s electricity crisis.

India’s coal minister, Pralhad Joshi, wrote on Twitter that state-run Coal India, the world’s largest fossil fuel miner, increased output in April to 53.47 million tonnes, 6% higher than the same month in 2019.

An astounding growth rate of 15.6%,” in deliveries to utilities, Joshi observed.

Imports by India’s states and private utilities over the next five months for blending with domestic coal are likely to be the highest in six years.

An unrelenting heatwave pushed electricity demand to a record high in April, leading to the worst power crisis in over six years and forcing India to go back on a policy to cut down coal imports.

The federal government has asked state government-owned utilities to import over 22 million tonnes of coal and private power plants to import 15.94 million tonnes, the power ministry said in a letter reviewed by Reuters.

The power ministry asked all utilities to ensure delivery of 50% of the allocated quantity by June 30, another 40% by end-August and the remaining 10% by the end of October, according to the letter to top officials at state energy departments and heads of private power plants.

 

Directives Not Mandatory

State government-run utilities have not imported for blending more than 7.1 million tonnes and private companies not more than 13.1 million tonnes since at least the year ending March 2017. Data predating the year ended March 2017 is not available.

Utilities are not obliged to honour the federal government directives, but two government officials who attended meetings related to rising power demand said that states were warned of blackouts if the suggested quantities were not imported.

States and private companies “must import” coal and “ensure continuous power supply in the respective states”, the letter read.

“To ensure minimum required coal stocks in power plants before onset of monsoon, it is necessary that placement of awards for importing coal for blending purpose is completed by 31.5.2022,” the ministry said in the letter dated April 28.

Private companies including Adani Power, Tata Power, Reliance Power, Jindal Steel and Power, Torrent Power and Sembcorp have been given import targets, the letter showed.

The companies did not immediately respond to requests for comment.

 

  • Reuters, with additional editing by George Russell

 

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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