During the fiscal year ending March 2024, the state-run utility, which generates over a quarter of India’s electricity, NTPC will import 16 million tons of coal for blending with domestic coal, according to authorities.
Despite near-record prices, NTPC Ltd.’s (NTPC.NS) coal imports this fiscal year would be the biggest in eight years, according to two senior company officials, as the business seeks to solve a domestic shortfall. “The Indian government has asked us to purchase 16 million tons, and we will do so to safeguard the country’s energy security,” one official explained.
As India’s economy rebounds from the pandemic and expectations for a hot summer, the increase in imports shows robust growth in demand for power. According to the second official, India’s federal government has asked all utilities to import roughly 33.5 million tons for blending this year, the top 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 than 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. Because of 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 tons this fiscal year, private utility operators have been told to buy 6.22 million tons, and other federal government-run utilities have been told to import 2.53 million tons for blending.
According to the officials, NTPC has already issued contracts to gain around 7 million tons, all of which have been bought from Indonesia at small premiums to benchmark pricing.
DEMAND FOR POWER SURGING
Despite record production and delivery by state-run Coal India Ltd (COAL.NS), which produces over 80% of India’s coal, India has had to limit coal supplies to the non-power sector and shelve plans for several fuel auctions.
Some non-power sector clients in India, who mostly utilize 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 show 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’ve completed every task.
The amount of coal produced in the United States has increased. The entire crisis stems from the closing of imported coal-fired and gas-fired power plants, said the first official.
According to government data, nine of the country’s 23 imported coal-fired power plants have closed, and most 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.
Published By : Ankit Singh
Edited By : Khushi Thakur
