Coal Import: India is backing away from coal import targets for utilities, the release reveals

India has eased coal import targets for utilities, giving them a target of importing 10% of their coal needs, marking a further U-turn in energy policy, according to an Energy Ministry release verified by Reuters.

State utilities and private power producers should instead decide for themselves how much coal to import, according to the notice sent to government officials and private utilities on Aug. 1.

“It has been determined that states/independent power producers and the Department of Coal may henceforth set the blending percentage after assessing the availability of domestic coal supplies,” the Department of Energy said.

In May, the Department of Energy said it would cut domestic fuel supplies to state utilities unless they import 10% of their coal needs to blend with domestic coal.

The move followed two of India’s worst power crises in recent memory, in October and April, which forced the federal government to reverse a long-standing policy of cutting coal imports.

In a separate notice to the federal government-run NTPC Ltd and DVC, also sent out on August 1, the Department of Energy called on companies to lower their blending percentages to 5%.

“If at any time supplies are depleted, the blending percentage could be re-examined,” the note to NTPC and DVC said, which also instructed the companies not to place new orders and to use imported coal already delivered.

India’s annual electricity demand is expected to grow at the fastest rate in at least 38 years, while global coal prices are trading at near record levels.

Demand for air conditioning has surged on the back of a relentless heatwave this year, while the economic recovery amid easing of COVID restrictions has pushed electricity demand to record highs.

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