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Business News/ Industry / Energy/  Mint Explainer: Why the govt wants power companies to continue blending imported coal
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Mint Explainer: Why the govt wants power companies to continue blending imported coal

The power ministry expects peak demand in the April-June period to reach 250 GW and said logistical issues would impact coal supplies

The government plans to commission a total of 12 GW of thermal power plants by the end of March. Image: PixabayPremium
The government plans to commission a total of 12 GW of thermal power plants by the end of March. Image: Pixabay

New Delhi: The power ministry on Monday directed domestic coal-based power generation companies (gencos) to maintain a 6% imported coal blend in power plants till June. The ministry had in October extended the norm till March 2024. 

Monday's decision comes amid anticipation of an increase in power demand in the upcoming summer season. Power plants dependent on imported coal have also been asked to operate at full capacity till June. The move gains significance as the country is heading into general elections and states are trying to ensure uninterrupted power supply in the run-up to the polls. Mint explores the reasons behind this governmental directive.

What prompted the government to extend the norm for blending imported coal?

The extension to blend imported coal has been announced amid anticipation of high power demand in the upcoming summer season. The power ministry, in its letter, said that the peak demand in the April-June period this year is likely to reach 250 GW, but logistical issues would impact coal supplies. It noted that supplies of domestic coal will remain constrained due to various logistical issues associated with railway network, although there has been an increase in the number of railway rakes. The government has been proactive in terms of coal supplies after panic situations in 2021 and 2022 amid an unanticipated rise in power demand backed by post-covid economic recovery. 

The India Meteorological Department last week predicted that maximum temperatures would be above normal in most parts of the country until May, raising concerns about an increase in power demand for cooling purposes.

What is the expected growth of power demand in the upcoming financial year?

The peak power demand is likely to grow 7% in FY25 to a fresh record high of 260 GW. The power ministry, in its letter, has said the demand may rise well above that level with rising temperatures. Last year, it had reached a record high of 243 GW. Ghanshyam Prasad, chairman, Central Electricity Authority (CEA) on Monday told reporters: "We expect the peak power demand this year at 260 GW."

What additional measures is the government taking to address rising electricity needs?

The power ministry has also directed the gencos to take up the timely import of coal for blending purposes and to continuously review their stock position. Power plants dependent on imported coal have been asked to operate at full capacity till June. Further, the government plans to commission a total of 12 GW of thermal power plants by the end of March.

How does the domestic coal production and inventory look for thermal stations?

Domestic coal production in the country increased 12.14% during the April-February period of the ongoing fiscal to 880.72 million tonne, compared to 785.39 MT during the same period of last fiscal, according to data from the coal ministry. The cumulative coal dispatch stood at 882.44 MT so far this fiscal compared to 794.41 MT during the corresponding period in FY23. According to CEA data, the total coal stock in the country's thermal power plants stands at 45.5 million tonne which is adequate to operate the plants for 16 days.

 

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Published: 05 Mar 2024, 04:57 PM IST
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