Lagatar24 Desk
New Delhi, Mar 30: Shortage of coal in the state government-owned utilities has led India to curtail coal supplies to the non-power sector and put on hold plans to increase the number of fuel auctions for utilities.
The supply cuts came months after India’s most severe coal shortfall in recent years caused power outages in certain areas lasting up to 14 hours. The arrival of summer has heightened concerns about electricity shortages throughout the country.
According to an internal letter accessed by Reuters, state-run Coal India has cut supplies to the non-power industry – which includes aluminium smelters and steel mills – to 275,000 tonnes per day, down 18.3 percent from February and 29.8 percent from March 2021.
The federal coal ministry has also put on hold a proposal to run three coal auctions for utilities over the next three months, saying the methodology to hold three auctions was “under process.” Instead, the ministry will hold one auction for the quarter.
According to announcements on its website, South Eastern Coalfields, a subsidiary of Coal India, has extended the payment deadline for auctions held on March 11, causing a delay in delivery, and has also cancelled another auction set for March 21.
Due to the yearly monsoon season, which reduces output in some locations, Coal India’s production and dispatch normally decreases from April to June and then again from June to September.
According to government data, coal stocks at state government-owned utilities, which account for a third of all coal-fired facilities in the country, have dropped to 22% of the required quantity.
Inventory levels of less than 25% are deemed “critical.” India generates roughly three-quarters of its electricity from coal.
On Wednesday, the federal coal ministry and Coal India did not respond to a request for comment.
On Saturday, the administration, on the other hand, stated it was “taking steps to assure enough coal supply.”
“It is asked that necessary measures be done to import coal for blending purposes based on demand assessment in order to address the coal shortage,” the administration said.
