Coal Import In India: Electricity may be ‘expensive’ due to coal import orders –

Kaushik Pradhan
The central government has directed all thermal power plants in India to import fresh coal. India’s power tariff is expected to rise again with the Centre’s order to make it mandatory to import 6 per cent of the total coal requirement of thermal power plants by next September. According to a section of experts, the price of electricity per unit may go up to Rs. In that case, the price of goods is bound to skyrocket again. As a result, crisis will increase in the daily life of common people.

On January 9, the Ministry of Power said in an order to the power secretaries and the chairmen and managing directors of the thermal power plants of all the states and union territories of India, “Until September 30, 6% of the required coal must be mixed with imported coal to generate electricity. If this order is violated, the concerned thermal power plant Domestic coal supply will be cut at the same rate.”

It may be noted that the coal crisis in India’s thermal power plants was acute during the summer months last year. So the power ministry ordered them to import coal to keep power generation normal. The directive said that 10% of the required coal should be mixed with imported coal to generate electricity. But, India was so short of domestic coal that many thermal power plants had to import up to 20% of coal to run. Coal India imported this coal from June to September last year.

According to sources, the cost of power generation at DVC’s thermal power plants has gone up by Rs 1.5 per unit due to the use of imported coal, which is much more ‘expensive’ than domestic coal. An expert in India’s power sector said, “Not only DVCs, but all thermal power plants had an increase in production cost. This time, the Center’s order to use 6% imported coal may increase the cost by up to Rs 1. And the cost increase in the energy sector is all due to tariffs. The increase is picked up by the distribution companies. Due to which the tariff is likely to increase at the same rate.”

However, it is not clear whether the electricity tariff will increase in the state for the use of imported coal. Because, for the past several years, CESC and West Bengal State Electricity Distribution Corporation have not immediately passed on the additional cost in the energy sector to the consumers. In the annual performance review submitted to the West Bengal Electricity Regulatory Commission at the end of the year, they showed that cost and requested to recover the charges from the consumers. Once the commission approves the application, they can collect it from the customers.

However, DVC has started immediate recovery of fuel surcharge from its customers in Durgapur-Asansol industrial area. Therefore, if the cost of power generation due to the use of imported coal increases again, the electricity bill of the consumers of DVC area is expected to increase.

But, why the center ordered to import coal? In this regard, the explanation of the Ministry of Power, although coal production in India increased in the fourth quarter of the current financial year, it is not enough to meet the unprecedented demand of the power sector. The power ministry expects a domestic coal shortage of 24 million tonnes in the first six months of the next financial year. Which means, domestic coal supply will be less by 1 lakh to 3 lakh tonnes per day compared to power sector demand. The Center has ordered the use of imported coal to meet this shortage.

But, where mountains of imported coal piled up at various ports in India 3-4 months ago due to logistical problems, there are questions about how much of the fresh coal imports will reach the thermal power plants on time.

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