Govt Prolongs Coal Import Mix Rule Over Election Power Scare

The government has extended the mandate for power producers to import 6% of their coal requirements until June 2024 to avoid power shortage during the polls. The peak power demand is expected to surge 7% to 260 gigawatts (GW), an all-time high, in the summer season. The government has taken this step to ensure uninterrupted power supply and safeguard its bid for a third term in power.

Coal Supply Constraints

The domestic coal supply has been constrained by various logistical issues, especially with the railway network. The ministry of power observed that despite the higher loading of coal in wagons, the supplies will remain inadequate to meet the rising demand for electricity. The ministry also pointed out that the reservoir level is 17% lower than last year, which will impact hydel power generation in summer.

Power Demand Spike

The power demand spike is expected to occur during the April-June period, when the country will also witness several state assembly elections. The ministry estimated that the country’s electricity demand will touch 229 GW during the summer of 2023, but it did not reach the projected level in April-July due to unseasonal rainfall. However, the demand picked up in August, September and October, mainly due to humid weather conditions and a pick-up in industrial activities ahead of the festive season.

Government’s Firefighting Measures

The government has started firefighting measures to ensure that the power shortage does not affect its electoral prospects. The ministry of power directed all thermal power plants to continue blending imported coal with domestic coal till June 2024. The blending proportion was increased from 4% to 6% in October last year. The ministry also asked all central/state generating companies and independent power producers to maintain adequate reserves in domestic coal-based plants.

Conclusion

The government’s decision to extend the coal import mix rule is a crucial stopgap measure to bridge the shortfall in coal supply and avoid potential disruptions in electricity supply during the crucial summer months and the polls. However, this decision may also have implications for the country’s energy security and environmental goals, as imported coal is more expensive and polluting than domestic coal.

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