Govt increases imported coal blending limit for TPPs to 6%, mandates ICB plants to run until June 2024

In the backdrop of a surge in electricity demand, the govt has increased the imported coal blending limit to 6 percent and mandated ICB plants to run until June 2024
A file photo of Minister for Power and New and Renewable Energy RK Singh
A file photo of Minister for Power and New and Renewable Energy RK SinghEnergy Watch

New Delhi: In the backdrop of a surge in electricity demand, the government has increased the imported coal blending limit for Domestic Coal-Based (DCB) plants from 4 percent to 6 percent and has extended the validity of Section 11 of the Electricity Act, 2003 until June next year, mandating Imported Coal-Based (ICB) plants to maintain production. The Ministry of Power has released two separate orders in quick succession on October 23 (for ICB plants) and on Wednesday (increasing the limit for blending of imported coal to 6 percent) to tackle the power demand situation.

The orders come as coal stocks deplete at thermal power plants, the availability of domestic coal remains inadequate and hydro power generation dips due to irregular monsoons as 2 GW of hydro power facilities remain out due to the flood in Sikkim.

Gap between coal availability & coal consumption rises to 12 MT

“The status of power supply position has been reviewed by Govt and it has been observed that there is consistent rising trend in the power demand in the country coupled with inadequate supply of domestic coal which has resulted in rapid depletion of coal stocks at Domestic Coal Based (DCB) Plants across the country. The gap between receipt of domestic coal and consumption of coal (domestic + equivalent domestic of imported coal) during 01st September to 09th October, 2023 was to the tune of 12 MT,” said the Ministry of Power in an order dated October 25.

Decline of 11% in hydro power generation in H1

The Ministry of Power said that a decline of about 11 percent has been recorded in hydro power generation in H1 of FY24 in comparison to the corresponding period of FY23 due to variable monsoon rainfall. “Approximately 2 GW of hydro capacity is out because of recent floods in Sikkim. The reservoir levels in Northern, Eastern and Southern regions are less compared to the previous year as on 9th Oct’ 2023, which has resulted in lower reservoir energy content at pan-India level. This has put an additional burden on coal-based thermal generation,” said the Power Ministry.

Govt asks TPPs to blend 6 percent coal until March 2024

In order to tackle the situation, the government has asked thermal power plants to increase the blending of imported coal from 4 percent (as mandated earlier through an order dated September 1, 2023) to 6 percent until March 2024.

“Therefore, in order to ensure uninterrupted power supply across the country, after careful consideration and in consultation with Central Electricity Authority (CEA) and Grid India, it has been decided blending of imported coal @ 6 percent (by weight) minimum may be continued till March 2024. The Gencos may continuously review their stock position and opt for blending as per the requirements if the shortfall in domestic coal supply is more than 6 percent,” said the Ministry of Power in the order dated October 25.

A file photo of Minister for Power and New and Renewable Energy RK Singh
Coal production up 12.73 percent y-o-y in FY23 so far: Coal Ministry

Govt asks ICB plants to run until June 2024

Extending the emergency clause of the Electricity Act, 2003, the government has also asked ICB plants to make power available to meet the demand until June 30, 2024. “In view of the surge in electricity demand, inadequate supply of domestic coal and the reduced availability of hydro generation, it is imperative that the availability of power from Imported Coal Based (ICB) generating stations is available to meet the demand. Therefore, after consultations with the Central Electricity Authority, Government have decided to extend the time period for Section 11 directive to imported coal-based generators, upto 30.06.2024,” the ministry said in an order dated October 23.

Under Section 11 of the Electricity Act, the government can ask power-generating companies under extraordinary circumstances to operate and maintain output in accordance with directions given. The government had earlier announced an extension in Section 11 in August this year, under which imported coal-based power plants were directed to run until October 31. Now that period has once again been extended until June 2024. ICB plants recorded a Plant Load Factor (PLF) of 74 percent on October 23.

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