Government plans to boost domestic coal production

The need for electricity has grown quickly. The rise in domestic coal supply has not kept pace with the thermal power plants’ increased coal needs. Importing coal is necessary for blending purposes. During 2009–2010, thermal power stations have been blending imported coal into their fuel mix.

The Ministry of Power instructed Central, State Gencos, and IPPs in a letter dated January 9, 2023, to take the necessary steps and start planning immediately to import coal through a transparent, competitive procurement for blending at a rate of 6 percent by weight for trouble-free operation until September 2023.

The majority of the nation’s coal needs are covered by domestic production and supply. The government is concentrating on growing domestic coal output and reducing non-essential coal imports into the nation. In 2021–2022, the total coal production in India increased by roughly 8.67 percent to 778.19 Million Tonnes (MT) from 716.08 MT in the corresponding period of the previous year.

The country produced about 785.24 MT of coal in the current fiscal year 2022–2023 (until February 2023) compared to about 681.98 MT during the same period the previous year, an increase of roughly 15.14 percent.

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Due to the difference in calorific value, the cost of imported coal cannot be compared to the cost of domestic coal. The cost of imported coal is influenced by international coal indices, the country of origin, and other elements like maritime freight and insurance that change depending on the global demand-supply situation.