India is planning to import nearly 76 million tonnes (MT) of coal this fiscal year to reach the fossil fuel shortfall in power plants, a move that can result in an increase in electricity tariff by 50-80 paise, Mint reported quoting two government officials.
As India’s coal production is affected in the monsoon season and coal supplies to power plants are hit in August and September, the report stated that state-run Coal India Ltd would import 15 MT to supply to the plants.
NTPC Ltd, India’s largest power generator, and Damodar Valley Corporation (DVC) will import another 23 MT of coal. Power generating firms (gencos) and independent power producers (IPPs) are planning to ship another 38 MT this fiscal, Mint reported.
India’s peak electricity demand met on June 9 touched a record high of 211 GW. On July 20, the maximum power demand met stood at 185.65 GW as demand eased during the monsoon.
The power tariffs will increase depending on the distance of the power stations from the seaport.
“The fuel bill will vary from generator to generator. For NTPC and DVC, after blending 10% of imported coal, the cost will be up 50-60 paise per unit. For others, it will depend upon distance, and vary from 50 to 80 paise. We shall be able to weather the crisis, given the arrangements that have been made,” one of the government officials told Mint.
The official added, “One has to observe till September to see if we have weathered the crisis. The imported coal orders by our companies have started coming in.”
During this period, the shortfall is generally around 15 MT, which the CIL will meet from July end, the official told Mint.
“The problem will come in August-September. We are assuming that the supply shortage may remain till October 15. Hopefully, we will tide over the problem with the help of imported coal. The problem may kick-in after August 15,” the official added.
India has decided to import coal as domestic coal supplies will not meet the daily demands in August, September and October, the newspaper stated.
Imports are necessary amid an increase in demand led by heat waves in the nation. Currently, power plants in India consume nearly 2.1 MT of coal daily.
“Separately, we have given targets to the states to source imported coal. While NTPC and DVC have been asked to import 23 mt for the whole year, state gencos and IPPs have been given a target of 38 mt for the whole year. Of this 16 mt is IPP’s target and 22 mt is state gencos target,” another official cited above told Mint.