The Ministry of Power has issued a directive for domestic coal-based (DCB) plants to import 4 percent of coal by weight until March 2024. This decision comes as the gap between coal consumption and receipt at such units exceeded 6 million tonnes (MT) in August 2023. Additionally, it has been mandated that the deficit in domestic coal supply will be distributed among all Generating Companies (Gencos) on a pro rata basis. Despite a requirement of 404 million tonnes (MT) for H2 FY24, only 397 MT of domestic coal can be made available due to logistical constraints.

Power demand in August 2023 reached a peak of 236.6 GW, marking a 21 percent increase compared to August 2022. This heightened demand, coupled with the continuous gap between coal consumption and receipt at DCB plants, has prompted a reassessment of coal availability at these plants from all sources.

In response, the Ministry, in consultation with the Central Electricity Authority (CEA), has extended the advisory from January 9, 2023, and modified the mandatory blending percentage to 4 percent (by weight) for the remaining period of FY24. This directive applies to Central and state Gencos, as well as independent power producers (IPPs), who are instructed to take necessary action to import coal transparently and through a competitive bidding process until March 31, 2024. The aim is to maintain comfortable coal stocks at power plants for smooth operations.

Furthermore, it has been stressed that when determining the share of domestic coal to be supplied to Gencos from Coal India/SCCL, their respective pithead stations must receive 100 percent of their domestic coal requirement. In cases where adequate domestic coal is available, Gencos are advised to refrain from using imported coal at their pithead stations.

While the Railways is making progress in resolving infrastructure issues, certain bottlenecks may take additional time to address. Given the continued high power demand and the mismatch between coal supply and demand, the need to continue using imported coal for blending has become necessary, according to the Power Ministry.