The Centre has asked thermal power generators to import coal for at least 10 per cent blending, citing shortage of domestic coal supply in a sharp reversal of its earlier directive of using domestic coal. At the same time, it alleged "several" states are selling unallocated power from central generating stations on power exchanges "at high price" and they would be penalised.

       The Union power ministry's warning came without the ministry spokesperson giving names of any specific state.

       The mandate to use imported coal for blending, on the hand, came two days after both the coal and power ministers denied any shortage of domestic coal. "Thermal power plants based on domestic coal will use imported coal up to 10 per cent for blending with domestic coal, wherever technically feasible, to meet the increased power demand in the country. Gencos shall expedite the process of importing coal for blending to meet the requirement,” said the notification on Tuesday.

       The power ministry said the revival of the economy had led to an increase in demand and consumption of electricity.

       “During the August-September period, the share of coal based generation has increased to 66 per cent from 62 per cent in 2019. As a consultant, total coal consumption during the same period has increased 18 per cent over the corresponding period in 2019. However, supply from Coal India is not commensurate with the requirement," said a notice from the fuel management division of the Central Electricity Authority (CEA), the technical arm of the power ministry.

       It further said the coal stock at power plants was depleting fast and currently stood at 7.3 million tonne.

       When the crisis started in August with a coal supply shortfall, the union power ministry earlier urged the generators to "consider import of coal". Only state-owned NTPC imported a meagre 2 million tonne.

       The union government as part of the 'Aatmnirbhar Bharat' initiative decided to reduce import of coal. Union minister for coal Pralhad Joshi said India would have zero coal imports by 2023-24, according to a press release by PIB in February 2020.

       In a November 2020 interview with Business Standard, Joshi said the government has decided not to import coal and that states and the Centre should work together towards it.

       "Despite having large reserves, we spent some Rs 2.40 trillion in 2018-19 on importing coal. CIL does pay for land and rehabilitation. It is building houses on wastelands, giving employment and paying compensation for the land taken. No state or central government, or their agencies, give these many jobs. The question is whether we want to go for imports or domestically produce it by building a whole ecosystem," he had said.

       The Centre in 2017-18 had tried for zero coal imports but it led to shortage compelling the thermal units to resume import of coal.

       Coal stocks at thermal units fell to 5 days in September 2018 followed by complaints from several states over a shortfall in supply. But within three years, a chain of events since August led to dwindling of coal stocks at thermal units. Currently, 16.8 Gw of power generation capacity has zero days of coal stock and 25 Gw has less than three days of coal.

       With the coal supply crisis and electricity shortage looming, several power discoms are also panic buying on the power spot market, taking the spot prices to record high of Rs 20 per unit (kWh) - the ceiling price in day ahead market.

       The union ministry of power however has blamed the states for this. "It has been observed that some states are not supplying power to their consumers and imposing load shedding in some areas. On the other hand they, are selling power in the power exchange at a high price," said a statement from the minister of power.

       The statement is in regards to the 15 per cent power from the central generating stations which is kept under 'unallocated power'. This power is given by the Central government on need-basis to states.

       "The states are requested to use the unallocated power for supplying electricity to the consumers of the state. In case of surplus power, the states are requested to intimate so that this power can be re-allocated to other needy states. If any state is found selling power in power exchange or not scheduling this unallocated power, then their unallocated power will be temporarily power reduced or withdrawn and re-allocated to other states which are in need," said the statement.

       The average market clearing price on Tuesday at the Indian Energy Exchange was Rs 15.85 per kWh. The maximum price was Rs 20 per kWh.