The Center has asked power producers to import up to 10% of their coal needs amid fuel shortages, and warned states that if federal companies sell electricity on power exchanges to cash in on rising prices, So they will curb their power supply.
India is the world’s second-largest coal producer, with the world’s fourth-largest reserves, but a massive surge in power demand, which has surpassed pre-pandemic levels, means that state-run Coal India The supply is no longer sufficient.
Increased economic activity after the second wave of the pandemic has fueled demand for coal, leading to a supply crunch, forcing north Indian states such as Bihar and Jharkhand to cut power for up to 14 hours a day . On Tuesday, the power ministry asked utilities dependent on local coal to import up to 10% of coal, to mix with domestic grades, to meet the increased power demand. Reuters said. The move could add to already high global coal prices.
These power plants usually import only a small amount of coal. More than half of India’s 135 coal-fired power plants, which supply nearly 70% of the country’s electricity, have fuel reserves that will last three days or less.
Central government-controlled power producers like NTPC Limited sign long-term power purchase agreements with distribution firms for the sale of most of their power generation. But 15% of their power is controlled by the Centre, which sells this so-called ‘unallocated’ power to the states.
The ministry said that if a state has a surplus of electricity, it should notify the federal government which will allocate that power to the states that need it.
In a statement, the ministry said that instead of supplying power to consumers, some states are cutting power and selling power to energy exchanges at higher prices.
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