Power woes push up coal imports

Coal imports, which had declined over the last four years, are expected to shoot up, with power plants running short on stocks.

Earlier this month, the Union power ministry advised states to consider importing coal for the next 2-3 years to run their power plants.

Many states, including Bengal and Maharashtra, run coal-fired electricity units of their own, besides having public sector NTPC and private power producers.

Officials said that while coal imports were discouraged over the last few years, the norms would be relaxed as stocks at power plants are running out with little chances of them being fully augmented.

Electricity plants have been cutting back on imported coal which they mix with the domestic variety to produce power because of the fall in the value of the rupee and rise in global prices.

However, with India unable to generate the amount of coal needed in the near future, coal ministry officials feel there is no way but to go ahead with larger imports.

Coal import is likely to increase to 145 million tonnes (mt) in 2018 and the uptrend will continue in the next four years, says a report prepared by the Minerals Council of Australia. The imports stood at 137mt last year.

Power units imported 8.64mt of coal in the first two months of this fiscal. Plants, which run solely on imported coal, imported around 5mt, while the ones which mix the fuel accounted for the rest.

“After several years of declining imports, the outlook for thermal coal import demand in India is improving because of strong demand growth and the inability of domestic supply to keep pace,” the report said.

Though one of the cornerstones of the Modi government’s economic policy had been to reduce coal imports, domestic mining has been unable to keep pace with the demand. Last year, India imported coal worth $22 billion. This is expected to go up 20 per cent in the coming years.

Mining plans

Coal ministry officials said they were stepping up plans to auction mines to encourage private mining which may help fill the gap.

“We need to re-energise the sector as Coal India Ltd will possibly not be able to produce 1 billion tonnes by 2020. If we need to have more coal on the table to satisfy demand, private sector participation through auctions to push production is a must,” said officials.

Private power producers have been allowed to switch their existing coal source with alternative mines nearer their plants to reduce time and cost of transportation as well as to ease the pressure on the railways.

Source: THE TELEGRAPH