As the country experiences peak power demand and a soaring peak shortage, the government is taking measures to address the issue of coal shortages to prevent blackouts. The Ministry of Power has extended the mandate for generating companies (gencos) to blend imported coal in thermal power plants until March 2024, as opposed to the earlier deadline of September 2023.

In conjunction with this extension, the government has also revised the blending percentage of imported coal, reducing it from the current 6 percent to 4 percent. The Ministry had previously issued an order on January 9, mandating a 6 percent blending to avert a potential coal crisis during the peak summer season.

The Ministry's order dated September 1 highlighted that despite an increase in domestic coal supply during the first quarter of FY24, it still fell short of meeting the demand. In August 2023, there was a substantial gap between coal consumption at domestic coal-based (DCB) plants and the receipt of domestic coal, resulting in a shortfall of approximately two lakh tonnes per day. This gap was partially bridged by importing coal, preventing coal stocks from declining to critical levels.

The revised rule applies to all thermal power plants, including Central and state gencos, as well as independent power producers (IPPs).

In line with this development, the Central Electricity Authority has estimated a domestic coal requirement of about 404 million tonnes between October 2023 and March 2024. However, logistical constraints associated with the railway network mean that there will be sufficient availability of rail transportation for loading and dispatching only 397 million tonnes of domestic coal during the second half of FY24, as stated in the ministry's order.