India backs down from its targets for coal imports for utilities, a notification reveals

3 Aug 2022 , 08:15 AM

According to a notice from the power ministry reviewed by Reuters, India has relaxed coal import requirements for utilities, leaving aside a target for them to import 10% of their coal needs and signalling yet another change in energy policy.

The notice, which was given to government officials and commercial utilities on August 1, instructs them to independently determine how much coal they must import. State government-run utilities and private power providers should do the same.

After evaluating the availability of domestic coal supply, states/independent power producers and the ministry of coal will now be able to set the blending proportion, according to the power ministry.

The electricity ministry had threatened to stop supplying domestic fuel to state-run utilities in May if they did not import 10% of the coal they needed to mix with domestic coal.

That action was taken in response to two of India’s greatest electricity crises in recent memory, which occurred in October and April, and compelled the federal government to abandon a long-standing policy of reducing coal imports.

The power ministry requested that the federal government’s NTPC Ltd. and DVC reduce their blending percentage to 5% in a second notice that was also sent on August 1.

While global coal prices are trading at close to record levels, India’s yearly electricity consumption is expected to increase at its quickest rate in at least 38 years.

This year’s relentless weather has increased the need for air cooling, while the economic rebound and the relaxation of COVID limitations have increased power demand to all-time highs.