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Mint Explainer: High power demand and the need to blend imported coal

The rise in demand follows sporadic monsoon rains and hot and dry weather conditions

India witnessed its driest August in a century, and amid hot weather conditions and the resultant surge in demand for power, the central government earlier this month directed domestic coal-based (DCB) power generating companies (gencos) to blend 4% imported coal till March 2024. 

In January, gencos were asked to blend 6% imported coal till September in order to meet high demand during the summer. In a recent notification the power ministry noted that Grid India has projected evelvated demand for power through FY24 which would necessitate blending of imported coal. 

Why were gencos asked to blend imported coal till March 2024?

The power ministry mandated blending of imported coal to ensure ample stocks at power plants for smooth operations. In its letter to gencos, the ministry had said despite an increase in domestic coal supply during the first quarter of FY24, it fell short of meeting the requirement.

In August, the gap between coal consumption at domestic coal-based plants and the receipt of domestic coal was about 200,000 tonne per day. “The gap was partly made up with import of coal without which coal stock would have declined to critical levels," it said. Further, supply of hydro power would decline going ahead with the end of the monsoon and the demand will have to be largely met by thermal power plants.

How has demand been?

Power demand touched a record high of 239.9 GW on 1 September, surpassing the Central Electricity Authority’s (CEA) estimate of 230 GW for the year. On 1 September, when the peak power demand neared 240 GW, the peak shortage had shot up to 10.75 GW. The rise in demand follows sporadic monsoon rains and hot and dry weather conditions. Demand, however, has eased since then and on Wednesday, 20 September, the peak demand was at 206.441 GW.