India sets coal import targets for late June as electricity problems mount


India has asked state-owned and private utilities to secure shipments of 19 million tonnes of coal from overseas by the end of June, according to a letter from the Energy Ministry, reflecting the urgency to secure supplies in an expensive market amid mounting blackouts.

The move, which marks the first time the world’s second-largest coal importer is issuing import schedules, may put pressure on global coal prices as utilities rush to avoid a repeat of April’s power crisis.

If the deadlines are met, imports by states and private utilities in the next five months for blending with domestic coal will exceed the entities’ annual imports in at least six years.

A relentless heat wave pushed power demand to a record high in April, leading to the worst power crisis in more than six years and forcing India to reverse its policy of cutting coal imports.

The federal government has asked state utilities to import over 22 million tons of coal and private power plants to import 15.94 million tons, the Department of Energy said in a letter verified by Reuters.

The Department of Energy asked all utilities to ensure delivery of 50% of the allocated amount by June 30, another 40% by the end of August, and the remaining 10% by the end of October, the letter to top officials in state energy departments and heads of private ones said power plants.

For at least the year ended March 2017, state utilities have imported no more than 7.1 million tons and private companies no more than 13.1 million tons for blending. Data prior to the year ended March 2017 is not available.

The Federal Ministry of Energy did not immediately respond to a request for comment.

Utilities are not required to comply with federal government guidelines, but two government officials attending meetings related to rising electricity demand said states have been warned of blackouts if proposed amounts are not imported.

States and private companies “must import” coal and “ensure continuity of power supply in respective states,” the letter said.

“In order to ensure the required minimum coal stocks in power plants before the onset of the monsoon, it is necessary that the awarding of surcharges for the import of coal for blending purposes is completed by May 31, 2022,” the ministry said in the April 28 letter.

Private companies such as Adani Power, Tata Power, Reliance Power, Jindal Steel and Power, Torrent Power and Sembcorp were named import targets, the letter showed.

The companies did not immediately respond to requests for comment.

“All state-owned power generation companies and independent power plants are required to submit a weekly management information system report on port placement, arrival and delivery of imported coal-fired power plants to the Central Electricity Authority (CEA) and Department of Energy every Friday letter read.

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