Lagatar24 Desk
New Delhi, April 6: The coal imports by India’s leading electricity generator NTPC Ltd would be the highest in eight years this financial year despite near-record prices, said two senior company officials according to Reuters, as the business seeks to alleviate a domestic shortfall.
During the fiscal year ending March 2023, the state-run utility, which generates over a quarter of India’s electricity, will import 16 million tonnes of coal for blending with domestic coal, according to authorities.
“We have been directed by the Indian government to import 16 million tonnes, and we will be doing it to ensure the country’s energy security,” one of the officials said.
As India’s economy rebounds from the pandemic and expectations for a particularly hot summer, the increase in imports shows robust growth in demand for power.
According to the second official, the central government has asked all utilities to import roughly 33.5 million tonnes for blending this year, the largest level in at least six years.
India’s increased imports could put more upward pressure on global coal prices, which hit record highs in March following Russia’s invasion of Ukraine, Europe’s largest supply. Prices have already fallen, but they are still much higher above the 2021 average.
India is the world’s second-largest coal importer, with key sources including Indonesia, Australia, and South Africa. There have been no previous reports about India’s coal import ambitions.
Due to higher-than-normal temperatures for the month and increased activity following the removal of COVID limitations, India’s power generation climbed at its quickest rate in three months in March, while power interruptions reached their highest level since October.
According to the second official, state government-run utilities have been ordered to purchase 8.75 million tonnes this fiscal year, private utility operators have been told to buy 6.22 million tonnes, and other federal government-run utilities have been told to import 2.53 million tonnes for blending.
According to the officials, NTPC has already issued contracts to acquire around 7 million tonnes, all of which has been procured from Indonesia at small premiums to benchmark pricing.
A request by Reuters for formal response from NTPC was not immediately returned.
Despite record production and supply by state-run Coal India Ltd, which produces over 80% of India’s coal, higher power demand has led India to restrict coal supplies to the non-power sector and shelve plans for several fuel auctions.
Some non-power sector clients in India, who mostly utilise power provided by utilities not connected to the national grid, are also using expensive power from the national grid, putting additional strain on utilities with low coal stocks.
The increased imports indicate the severity of India’s coal shortfall as summer approaches, when power demand normally rises due to increased air-conditioning demand and increased industrial activity.
“We have done everything. Domestic coal production has risen. The whole crisis is because of the closure of imported coal-based power plants and gas-fired plants,” the first official said.
According to government data, nine of the country’s 23 imported coal-fired power plants have closed, and the majority of the country’s gas-fired power plants are either not operating or operating at a lower capacity, as industry officials claim that high global fuel prices have made these plants too expensive to run at full capacity.
