Coal import to be checked by rising domestic production

The government’s effort to increase domestic coal production and power demand falling with the onset of the winters will check coal imports, a senior coal ministry official has said. Power plants across the country had imported 6.6 MT coal in October, 43.5% higher than the monthly average import quantity recorded this year. In the same month, electricity demand had surged 14% year-on-year.

After October’s massive demand rise, the country’s electricity requirement registered a 5.5% y-o-y growth in November. On the same month, domestic coal production was about 63 MT — the highest in the fiscal. In the April-November period, the total coal production in the country was 434 MT, 9.8% higher than the corresponding period last years. Coal India’s production rose 8.8% to 358.3 MT in these months.

As the power utilities were given priority for coal supply during the periods of higher demand, captive consumers, who primarily run their electricity generation units to cater to own industrial production, had to resort to importing coal.

“We have resumed supply to coal supply to these units which would cut imports,” the official told FE on conditions of anonymity.

“With coal stock situation in the power plants gradually improving, we are also raising the quantity allotted under the e-auction mode,” the official added.

Experts have pointed out that coking-coal comprises 21% of the country’s coal import, and that cannot be controlled due to unavailability of the product in the country. Another 15% is imported by power plants which have been designed solely to operate on imported coal with low-ash content.

“The final quarters are usually the time when coal production peaks, and we are banking on that to replace the incremental imports,” another ministry official said.

Coal India Ltd