The Indian government has decided to extend the requirement for the nation’s power producers to import 6% of their coal needs until June, despite sufficient availability of domestic coal. This decision comes amidst transportation challenges and increased electricity demand, as mentioned in a note from the power ministry on Tuesday.
Last year, India had mandated utilities to import 6% of their coal requirements until March due to a significant surge in power and coal demand. Despite Coal India, a state-run company, achieving record coal production (which contributes to about 80% of India’s domestic coal production), logistical constraints within the country’s railway network necessitated the need for imports, as stated in the note.
The power ministry forecasts peak power demand to rise to 250 GW during the summer months (April-June 2024), which is 3% higher than the previous record of 243 GW set in September last year.
Coal remains the primary source for about 75% of India’s power generation, with coal-fired plants accounting for over three-quarters of the country’s use of this fossil fuel.
