The Ministry of Power on Wednesday threatened to cut domestic coal supply of state government-run utilities by 5% if they do not import coal for blending by June 15.

If blending with domestic coal is not started by June 15, 2022, then the domestic allocation of the concerned defaulter thermal power plants will be further reduced by 5%, the power ministry said.

This comes in the backdrop of high demand for power and insufficient coal supply.

Heat wave conditions have prevailed in the northwest and central regions of India during March and April. The average maximum temperature recorded in the country during April 2022 was the third highest at 35.30ºC since 1901.

The power ministry has issued directions to all power generation companies that if the orders for import of coal for blending are not placed by May 31 and if the imported coal for blending purpose does not start arriving at the power plants by June 15, all the defaulter utilities would have to import coal for blending purpose to the extent of 15% up to October 31.

This has been done in order to meet the shortfall of imported coal for blending purposes in the April-June quarter. Not much blending has taken place in the months of April and May 2022, the power plants (which have not yet started blending by imported coal) will ensure that they blend coal at the rate of 15% up to October 2022 and thereafter at the rate of 10% from November 2022 to March 2023, the ministry further says.

The government says that keeping in view the likely less materialisation of coal supply from domestic sources as compared to the requirement to meet power demand, domestic coal will be allocated proportionately to all generation companies based on likely availability from June 1 and the balance requirement will need to be met from imported coal for blending purpose and target set for production in captive coal mines.

All gencos have been advised to ensure adequate stocks at their power plants for smooth operation until October 2022, the ministry says.

Union Minister of Power and New & Renewable Energy RK Singh has written to states that state gencos may be asked to take immediate steps to import coal for blending in order to meet their requirement during the Monsoon season. The minister, in separate letters to Haryana, Uttar Pradesh, Karnataka and West Bengal, has expressed concern that tender process for coal import has either not started or not completed in these states.

The ministry had earlier advised state gencos to import 10% of coal requirement for blending purposes. States were advised to place orders by May 5 so that delivery of 50% quantity is ensured by June 30, 40% by August 31 and remaining 10% by October 31.

Singh stressed that in case of failure on either account, it would not be possible to give additional domestic coal to make up the shortfall.

The power minister highlighted that due to increase in demand and consumption of electricity, the share of coal-based generation has increased and the total coal consumption by power plants has also increased.

Follow us on Facebook, Twitter, YouTube & Instagram to never miss an update from Fortune India. To buy a copy, visit Amazon.