India to import coal for first time in years as power shortages loom

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A worker sits on a truck loaded with coal at a railway coal yard on the outskirts of the western Indian city of Ahmedabad November 25, 2013. REUTERS/Amit Dave/File Photo

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NEW DELHI, May 28 (Reuters) – State-owned Coal India (COAL.NS), the world’s largest coal mine, will import fuel for utilities, a letter from the energy ministry said on Saturday. seen by Reuters, as shortages raise concerns. on new power cuts.

It would be the first time since 2015 that Coal India has imported fuel, underscoring efforts by state and federal authorities to source supplies to avoid a repeat of April, when India faced its worst fuel cuts. current in more than six years.

“Coal India would import coal for blending on a government-to-government (G2G) basis and supply … to thermal power plants of state producers and independent power producers (IPPs),” the Federal Ministry of Government said. Energy in the letter dated May 28. .

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The letter was sent to all utilities, senior federal and state energy officials, including the federal coal secretary and the chairman of Coal India.

India is expected to face a wider coal shortage in the third quarter of 2022 due to expectations of higher power demand, fueling fears of widespread power outages. Read more

The Department of Energy said in the letter that the decision was made after nearly all states suggested that multiple state coal import tenders would lead to confusion and sought centralized supply through CoalIndia.

India has stepped up pressure on utilities to increase imports to blend with local coal in recent days, warning of cuts in the supply of coal mined in the country if power plants do not constitute coal stocks thanks to imports. Read more

But the Ministry of Energy asked the States on Saturday to suspend the “ongoing” calls for tenders.

“Tenders being processed by state producers and IPPs for the import of coal for blending may be suspended pending price discovery by Coal India via the G2G route, in order to source coal from less at possible tariffs,” the ministry said.

Coal inventories at power plants have fallen about 13% since April to the lowest pre-summer levels in years.

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Reporting by Sudarshan Vardhan Editing by Kirsten Donovan and Helen Popper

Our standards: The Thomson Reuters Trust Principles.

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