India sets coal-import deadline for govt-owned power producers

KOLKATA (miningweekly.com) – Having already announced a stated policy to reduce coal imports to nil, India has directed government-owned thermal power plants to stop coal imports from April 1.

In advisory to thermal power plants owned and operated by federal or provincial government companies, the Coal Ministry has said that coal contracts and shipment from overseas have to be concluded by the start of the next financial year, adding that Coal India Limited (CIL) will supply thermal power producers’ coal demand.

No advisory was officially issued to private power producers, although CIL and the Coal Ministry have been in touch with these utilities to convince them to increase offtake from the domestic miner, particularly at a time when international coal prices are rising, a senior government official said.

“We have discussed separately with every public sector power company and have made sure that their imports turn to zero by April 1, 2017,” Coal Secretary Anil Swarup said on Thursday.

He stated that State-owned companies’ coal imports would decline from 40-million tons in 2015/16 to 15-million tons in 2016/17.

Taking a lead, the country’s largest power producer, NTPC, has already stopped contracting for imported thermal coal and all shipments scheduled to come in over the next few months of the current financial year are on account of contracts signed last year.

NTPC’s peak level of imported coal was estimated at 16-million tons a year.

However, as the coal supply glut in the domestic market stems more from a demand crunch than a supply side spike, shortages in future may be a distinct possibility.

In a veiled acknowledgement, Swarup said, “at present, the coal stock situation looks like there is a surplus. However, it is not enough to give coal to everyone and we are not fully comfortable about making coal available to everyone at this level of stock position.”

CIL is carrying estimated pit-head stocks of 50-million tons, while each thermal power plant has an average stock of about 15 t of coal.

According to the Coal Secretary, the apparent surplus coal availability could quickly reverse into a shortage situation with a 6% to 7% rise in average plant load factor (PLF) at thermal power plants.

According to one analyst’s report, thermal power generation was up a mere 0.3% year-on-year during the July-to-September 2016 period.

As a result of a slowdown of the industrial sector, the average PLF of thermal power plants during the two quarters of the current financial year reduced to 54.6%, from 60% during the corresponding period of the previous year, which was the lowest in the last 15 years.