India expects utilities to slash down domestic coal power plants as fast as this June by 11.1%. The government asked some utilities to import more to add inventories as power demand rises. Actually, the government has reversed a policy to reduce coal imports to zero. They even invoked an emergency law to manage imported coal-based utilities. In addition, they plan to reopen closed mines to face the surge of power demands. The power demand on this occasion is growing at the fastest in at least 38 years.
Earlier, the government expected to slash at least 56.2m tonnes of domestic coal supply targets. The earlier total was as much as 63.3m tonnes. They calculate that it will allocate domestic coal to power-generating companies proportionally. This is based on the availability as of June 1. The official said that this is to balance the requirement to attain imported coal and realistic assessment of production driven from captive coal mines.
In addition, June imports targets have risen by 16.2% to 4.89m tonnes.
The power ministry argued that the decreased imports would create hardships on domestic coal supply. Plus, it would result in depletion of fuel inventories over power plants. Since April, the power plants’ coal inventories have decreased by sixth. Thus, Indian utilities are starting the year with fuel stocks that should last at least nine days.
That is basically, the lowest at least in nine years. Last week, India warned state government-run utilities of domestic coal supply cuts if they do not import coal by June 15, said Reuters. In this case, miners would add local supply to utilities importing more. Thus, it would support inventories stock if additional coal is available, said the ministry.
COAL.NS, the state-run miners and Singreni Collieries, would now target supply of 47.45m tonnes in June. This is actually 9.3% lower than the earlier target of 52.3m tonnes. Captive mines or supply targets have restrictions. The slash is to get 8.87m tonnes, over 20% that the earlier 11m tonnes.