Lok Sabha Question No. 1879 (UNSTARRED), answered on 2023-12-14
Subject: Rise in Cost of Power Generation due to Fuel Import
Ministry: POWER
Asked by: Y. S. Avinash Reddy

## GOVERNMENT OF INDIA MINISTRY OF POWER LOK SABHA UNSTARRED QUESTION NO.1879

## ANSWERED ON 14.12.2023

## RISE IN COST OF POWER GENERATION DUE TO FUEL IMPORT

1879. SHRI Y.S. AVINASH REDDY:

Will the Minister of POWER be pleased to state:

- (a) whether the Ministry of Power has directed all Domestic Coal-Based (DCB) power generation companies to mandatorily import and blend four percent coal through the open-bidding process till March 31, 2024, as the supply of coal was not commensurate with the requirement;
- (b) if so, the reasons for taking such a decision particularly when the Ministry of Coal has stated that the country has adequate coal to meet increasing energy demand;
- (c) whether the cost per unit of power generation has risen from Rs. 2 to Rs. 7 to 8 due to import of fuel/coal; and
- (d) if so, the details and the present status thereof?

## A N S W E R

THE MINISTER OF POWER AND NEW & RENEWABLE ENERGY (SHRI R.K. SINGH)

(a) to (d) : Coal,  whether  domestic or imported,  is  procured  by  Thermal  Power Plants  separately  and  as  per  their  requirements.  There  are  some  plants  based exclusively on imported coal. Thermal Power Plants have been importing coal for blending purpose from 2009 onwards. Detail is at Annexure.

With increase in electricity demand from July'21 onwards the consumption of coal in Thermal Power Plants increased and the supply of domestic coal on a daily basis was less than consumption which resulted in depletion of coal stock and  stocks  at  Plants  end  came  down  from  28.7  Million  Tonnes  (MT)  as  on 30.06.2021  to  about  8.1  Million  Tonnes  (MT)  as  on  30.09.2021.  Therefore,  in December 2021, Ministry of Power advised State GENCOs and IPPs to import @4% and Central GENCOs @10%  of their requirements during 2022-23.

.........2.

During April-Sep' 2022 (QI, Q2 of FY 2022-23) the receipt of domestic coal was about 355 MT against the consumption of 385 MT (Dom: 359 MT +Imp: 1.4 x 18.9 MT) - a shortage of 30 million tonne. The gap between supply of domestic coal and consumption of coal was about 1.6 lakh tonnes/ day during  this period. On  the  improvement  of  the  situation,  Ministry  of  Power  advised  GENCOs  on 01.08.2022 to take decision regarding blending at their level taking into account the  domestic  coal  supply  and  stock  position (need  based  blending) with continuous monitoring of stock levels.

The gap between daily coal consumption and daily arrival of domestic coal ranged  between 2.65  Lakh Tonnes  to  0.5  Lakh  Tonnes  between  the  months  of September'2022 and January'2023. If the imports for blending had not been made, the  coal  stocks  in  thermal  power  plants  would  have  reduced  to  ZERO  in September'2022 and would have continued so, leading to widespread power cuts and blackouts. Therefore, Ministry of Power advised Central, State Gencos and Independent Power Producers (IPPs) on 09.01.2023 to import coal @ 6% by weight so as to have sufficient coal stocks at their power plants for smooth operations till September' 2023.

The gap between daily coal consumption and daily arrival of domestic coal increased from 1.30 lakh tonnes per day to 2.80 lakh tonnes per day between the month of June' 2023 and September' 2023. Therefore, Ministry of Power advised central  &  state  Gencos  and  IPPs  on  01.09.2023  and  25.10.2023  to  import  coal through a transparent competitive procurement process for blending.

Average power purchase cost increased by 71 Paisa only between FY 22 and FY 23. This is because of increase in various costs - including increase in transmission and distribution costs.

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ANNEXURE ANNEXURE  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (d)  OF  UNSTARRED QUESTION NO. 1879 ANSWERED IN THE LOK SABHA ON 14.12.2023 **************

| Import of coal by power sector   | Import of coal by power sector   | Import of coal by power sector       | Import of coal by power sector   |
|----------------------------------|----------------------------------|--------------------------------------|----------------------------------|
| Fig in Million Tonnes            | Fig in Million Tonnes            | Fig in Million Tonnes                | Fig in Million Tonnes            |
| Year                             | Import for Blending              | Import by Imported coal based plants | Total Import                     |
| 2009-10                          | 18.8                             | 4.4                                  | 23.2                             |
| 2010-11                          | 21.1                             | 9.4                                  | 30.5                             |
| 2011-12                          | 27.3                             | 17.6                                 | 44.9                             |
| 2012-13                          | 31.1                             | 31.6                                 | 62.7                             |
| 2013-14                          | 38.6                             | 40.9                                 | 79.5                             |
| 2014-15                          | 47.6                             | 42.5                                 | 90.1                             |
| 2015-16                          | 37.1                             | 44.0                                 | 81.1                             |
| 2016-17                          | 19.8                             | 46.3                                 | 66.1                             |
| 2017-18                          | 17.0                             | 39.4                                 | 56.4                             |
| 2018-19                          | 21.4                             | 40.3                                 | 61.7                             |
| 2019-20                          | 23.8                             | 45.5                                 | 69.3                             |
| 2020-21                          | 10.4                             | 35.1                                 | 45.5                             |
| 2021-22                          | 8.1                              | 18.9                                 | 27.0                             |
| 2022-23                          | 35.1                             | 20.5                                 | 55.6                             |
| 2023-24 (Apr- Oct)               | 13.6                             | 21.7                                 | 35.3                             |

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