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NTPC to import 5.4 million tons of coal to meet growing summer demand

The Union power minister also informed the Upper House that Railways has taken steps to purchase one lakh wagons for coal transportation

March 14, 2023 / 06:19 PM IST
Representative image

Representative image

State-run electricity giant NTPC Limited is planning to import 5.4 million tons (MT) of coal in the first half of the financial year 2023-24 to operate all its thermal power plants (TPPs) to full capacity during the summer, Union power minister RK Singh told the Parliament on March 14.

This will be an increase of 19 percent from last year when NTPC, the country’s biggest power generating company, invited bids to procure imported 4.53 MT coal for blending with the domestic dry fuel in thermal plants. This is likely to be an annual affair during peak summers as TPPs mostly reel under the problem of dry fuel shortage due to a steep increase in demand. Senior officials told Moneycontrol that the tender is likely to be floated in April.

“Electricity demand has increased rapidly. The increase in the supply of domestic coal is not commensurate with the coal requirement of the thermal power plants and therefore, a need has arisen to import coal for blending purpose. Further, there are logistics constraints of Railways in transportation of coal in certain areas,” Singh said in a written reply to a question raised in the Parliament.

India has an installed electricity generating capacity of 411648.60 megawatts (MW) of which 236468.91 MW are TPPs (57.44 percent). The rest constitute renewable energy and nuclear sources.

The minister said the focus of the government is on increasing the domestic production of coal and eliminating non-essential import of coal in the country. “Most of the requirement of coal in the country is met through indigenous production/supply. The all-India coal production in the year 2021-2022 was 778.19 MT as compared to 716.08 MT during the same period of last year with a growth of about 8.67 percent. Further, in the current financial year 2022-2023 (up to February 2023) the country has produced about 785.24 MT of coal as compared to about 681.98 MT during the same period of last year with a growth of about 15.14 percent,” Singh said.

As on March 5, coal stock available at these TPPs is about 34 MT, which is enough to run the plant for 12 days at a requirement of 85 percent plant load factor (PLF). This is about 50 percent of the coal stocking norms issued by Central Electricity Authority (CEA). During this summer, the peak demand is expected to be around 230 GW.

Further, data from March 11 reviewed by Moneycontrol showed that of the 180 coal-fired plants, 63 had critical coal stocks, meaning it is less than 25 percent of the normative stock as stipulated by the CEA. Power utilities are importing coal considering their requirement as well as cost economics.

The ministry of power on January 9 directed Central and state gencos as well as independent power producers (IPPs) to take necessary actions to import coal for blending at the rate of 6 percent by weight through a transparent competitive procurement so as to have sufficient stock at their power plants for smooth operations till September 2023.

“The price of the imported coal is not comparable with the price of the domestic coal due to difference in calorific value. The pricing of imported coal is linked with International Indices for imported coal, source of origin and factors like ocean freight, insurance etc. which vary with the international demand-supply scenario. Every generating company imports coal as per its requirements. The cost of fuel including imported coal is passed into generation tariff in accordance with regulations of the Electricity Regulatory Commission concerned. Import of coal by a thermal power plant is a need-based activity and has been going on for last many years,” the minister said on March 14.

Singh also informed the Upper House that Railways has taken steps to purchase one lakh wagons for coal transportation.

Sweta Goswami
first published: Mar 14, 2023 06:17 pm