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    HomeBusinessMinistry to cut domestic coal for defaulting gencos by 5%

    Ministry to cut domestic coal for defaulting gencos by 5%

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    The ministry of power on Wednesday told gencos that if they don’t start blending imported coal with domestic fuel by June 15, 2022, then their domestic coal allocations would be cut by 5%. All gencos have also been advised to ensure adequate stocks at their power plants for smooth operation until October 2022.

    The ministry of power on Wednesday told gencos that if they don’t start blending imported coal with domestic fuel by June 15, 2022, then their domestic coal allocations would be cut by 5%. All gencos have also been advised to ensure adequate stocks at their power plants for smooth operation until October 2022.

    In a directive issued on Wednesday, the ministry also extended the timeline for blending of 10% imported coal to March 2023 from October 31, 2022.

    The ministry said if the gencos do not place the order for blending of coal for the April-June period by May 31, 2022, and if the imported coal does not start arriving at the power plants by June 15, all the defaulting gencos will have to import coal to the extent of 15% of the requirement in the remaining period up to October 31.

    The ministry has noted that not much blending has taken place in the months of April and May 2022, the power plants (which have not yet started blending imported coal) will have to ensure that they blend coal at the rate of 15 % up to October 2022, and thereafter at the rate of 10% from November 2022 to March 2023.

    In a letter written to state secretaries/principal secretaries and all gencos, the ministry has said, in view of less materialisation of coal supply from domestic sources as compared with the requirement to meet power demand, domestic coal will be allocated proportionately to all gencos based on likely availability from June 1, 2022. The balance requirement will need to be met from imported coal for blending purpose and the target set for production in captive coal mines.

    The ministry has directed that the imported coal-based plants should run and the states should import coal for blending, as in the previous years.

    On May 5, the ministry of power had issued directions under Section 11 of the Electricity Act 2003 that all the imported coal-based plants should run at full capacity.

    However, the import by states of coal for blending is not satisfactory.

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