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India asks power plants to import 6% of coal in 9 months

News:  India’s electricity ministry has instructed utilities to import 6% of their coal requirements in the first nine months of this year, warning that local supply may be reduced if import targets are not fulfilled.

Coal and Ministry of Power

• More than 70% of India’s power is produced using coal. According to a letter written to the managing directors of all utilities and state energy departments, domestic coal supply, which was forecast to be 392 million tonnes in the six months ending in September, is anticipated to fall 24 million tonnes short of demand.
• A power ministry official said in the letter that energy demand has increased significantly and is likely to remain at a higher level for the first half of 2023/24.
• Given that New Delhi has a significant amount of control over domestic coal production and distribution, the ministry’s comments to the officials in the letter amount to a directive.
• India’s power minister encouraged states to increase coal imports over the next three years to increase stocks and fulfill demand despite the country’s long-term objective to minimize coal imports.
• The energy-starved nation has made international pledges to gradually reduce its fuel use, but it has stated that it won’t phase out coal-fired power plants anytime soon because they offer affordable electricity.

Coal in India

• India has been mining coal since 1774 and has mined 777.31 million metric tonnes (856.84 million short tons) of coal in FY 2022, making it the second-largest producer and consumer of coal after China.
• The largest coal-producing city in India, Dhanbad, has been dubbed the nation’s coal capital. Between 1973 and 2018, when coal mining was nationalized, state-owned Coal India held a monopoly.