CIL to Import Coal for First Time

As the temperature has risen this summer, the coal shortage in the country has become apparent. Complaints have been raised that thermal power plants are not able to increase power generation to meet the demand due to lack of supply. Most of the states are in the grip of load shedding. In this case, Coal India (CIL) is the first direct coal import route for power plants. They will also supply it to two companies in West Bengal, PDCL and CESC.

Production of imported coal-fired power plants has suffered due to high prices in the world market. Due to low stocks of domestic coal, the rest could not produce as required. After that the centre directed to import coal compulsorily. All state power generating companies and independent power generating companies (IPPs) are asked to purchase certain quantities from the world market and mix them with domestic reserves. But the Power Workers-Engineers’ Union (AIPEF) and the opposition objected to the high import rates. In the meantime, Coal India is on the path of import. The country’s state-owned coal mining and supplier company has asked for an international tender for that. The import target in the first phase is 24 lakh tonnes.

CIL has been given the responsibility of importing coal on behalf of the power companies. The Center warned that if the imported coal is not mixed, the domestic supply of the concerned power companies will be reduced. However, if they want, they can buy it from abroad. The deadline to submit a purchase order through CIL was May 31. It was later extended to 3 June. The Center said that power companies which do not quote or ask for tenders for import will not get more than 70 per cent of the required domestic coal. After June 15, the supply will be further reduced by 60 percent. Those who follow the import instructions will be allotted the remaining coal.

Claims of CIL

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According to CIL, 26 manufacturing companies have ordered imports. This includes seven state power companies and 19 IPPs. According to PDCL, their power plants will have to import 15.4 lakh tonnes of coal a year as per the government’s instructions and mix it with domestic reserves. Sources said that they have ordered the import of five lakh tonnes of coal.

CIL’s message, however, is that the shortfall in power generation is not due to a shortage of domestic coal. This is because they supplied 10.25 crore tonnes to the power companies in April-May. Which is 16.7 percent more than last year. Instead, they blamed three factors for the problem of power generation. An official of the company claims that the first reason is the sudden increase in production activities in the country after Covid. Second, all 15 power companies used imported coal. Which has declined since the Russia-Ukraine war after the rate increased. As a result, power generation has decreased by about 50 percent. Third, the demand for electricity increases in extreme heat.