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India to Initiate Emergency Law to Fully Boost Coal Power Output

Darren Maung
Darren is an aspiring writer who wishes to share or create stories to the world and bring humanity together as one. A massive Star Wars nerd and history buff, he finds enjoyable, heart-warming or interesting subjects in any written media.
Published: March 1, 2023
A worker operates a JCB machine to load coal onto a goods train at the Amrapali coal mines in Peeparwar in India's Jharkhand state on April 30, 2022. (Image: AFP via Getty Images)

On Feb. 20, the Indian government brought forth an emergency law to fully drive coal output from power plants in preparation for an expected rise in demand for power from March to June, an internal power ministry notice says according to Reuters. 

This is the second time the emergency law has been executed in recent years, which will drive up coal usage. 

Coal overdrive

The emergency law to maximize coal power output was announced last month, Reuters reported. In January, the government planned to have its power plants consume around “eight percent more coal in the financial year ending March 2024.”

The power ministry notice was given to all power plants — which have a total capacity of 17 gigawatts combined — that run on imported coal, saying that the ministry anticipates that they will run at full capacity, while offering power to buyers on exchanges.

Several of India’s power plants, like those under Adani Power and Tat Power in Gujarat, were unable to operate at full efficiency because they had to rely on cheap domestic coal.

With the plan to put the law into effect on Mar. 16, the power plants have been given time to import their coal before an expected rise in power consumption. This is expected to last until June 15.

The notice also said that the variable tariff for the plants would be settled by a “government-appointed panel,” which would use “the index with the lowest cost of imported coal for calculating the variable tariff for every plant.”

In anticipation of a peak in demand — around 229 gigawatts by April — the government will need to utilize a thermal capacity of 193 gigawatts for that month, the notice said. It also anticipates that its power plants would consume around eight percent more coal in the financial year ending March 2024.


Coal industry cheers

The demand for more power supply has incentivized the need for more coal mines and an increase in imports.

“King coal is coming back and coming with a big bang,” Anil Kumar Jha, chairman of Jindal Power Ltd., told the Coaltrans India conference, which saw every speaker joining him in cheers for the promise of more coal, Reuters reported.

Coal imports are already soaring, with 10.19 million tonnes of coal being delivered in February alone, data from analysts Kpler says.  However, thermal coal imports could decrease in the next few years, with predictions that the trade would conclude by 2030.

The state-owned Coal India Ltd. will reportedly produce one billion tonnes of coal by 2025-26, CareEdge Ratings wrote in a report.

With the Indian government willing to distance themselves from other nations to focus on energy transition on its own terms, Prime Minister Narendra Modi’s office approved coal deals from controversial tycoon Gautam Adani, even if it was deemed “inappropriate.”