India to face more power cuts due to coal shortage, center allows tolling of coal.

India is likely to face more power cuts this year as utilities’ coal inventories are at the lowest pre-summer levels in at least nine years and electricity demand is expected to rise at the fastest pace in at least 38 years, officials and analysts say.

Power cuts could stifle industrial activity in Asia’s third largest economy.

The Union Ministry of Power has recommended that power generation companies must try to import coal for blending up to 10 percent and has allowed “tolling” to thermal power plants to deal with rising power demand amid constrained supply of domestic coal.

Tolling helps states to give coal to some other plant through competitive bidding where power can be generated and transmitted to the state with the original coal linkage.

The union power ministry has allowed states to use tolling facility of up to 25% of linkage coal in a bid to cater to the growing power demand and curb power shortage in the country. Keeping in view the rapidly increasing demand for power, the minister recommended that all gencos should endeavor to import coal for blending up to 10%.

During the meeting state-wise targets were fixed and it was urged to ensure delivery of coal for blending purpose before onset of monsoon as domestic coal supply gets affected during rainy season.

The minister took review of the operations of imported coal based plants and directed all the procurer states to ensure that all ICB plants are operational at fair and reasonable tariffs. It was decided to resolve all the operational issues in ICB plants and make them fully functional.

The Union Ministry of Power has recommended that power generation companies must try to import coal for blending up to 10 percent and has allowed “tolling” to thermal power plants to deal with rising power demand amid constrained supply of domestic coal.Normally, a power plant must maintain 26 days of coal stock. However, currently, several power plants are reporting critical levels. Data from the Central Electricity Authority (CEA) shows that 97 power plants out of the 173 CEA has information on, have critical levels of coal inventory. Of the 173, there are 155 non-pithead plants or power plants which are not near to coal mines. They have an average of 28% of the stock compared to the normal scenario. The 18 plants that are nearby coal mines have an average stock of 81% of the normal requirement.

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