CIL To Directly Import Coal For Utilities.

India’s coal navratna, the Kolkata-based Coal India Ltd (CIL), is taking a two-pronged approach to meet the fuel needs of the country’s power plants. Apart from forging global alliances for coal procurement, it will import coal directly for NTPC Ltd and other power utilities to bridge the widening demand and supply gap. It has sought advice from power sector regulator Central Electricity Authority (CEA) on how much to buy.

The Planning Commission of India has mandated CIL to directly import coal. Earlier, it had to go through MMTC Ltd or other government canalising agencies.

CIL has already prepared tender documents in association with the Indian Institute for Foreign Trade but is unable to float the global tender as the power utilities are yet to confirm the names of the facilities where the coal has to be shipped so that the linkages can be firmed up.

“We have been mandated to import 4 million tonnes for NTPC and 2 million tonnes for other power utilities, but we are still waiting for a confirmation from the power utilities about where the coal has to be landed,” a senior CIL official, who did not wish to be identified, said.

Of India’s total installed capacity of 155,859 MW, 64 per cent or approximately 99,749 MW is generated by coal-fired thermal power plants. But according to the CEA’s daily coal stock report updated till June 23, 19 thermal power plants had super-critical coal stocks (less than four days of coal stock) and 32 reported critical coal stocks (less than seven days of coal stock).

“If you want to solve chronic power problems, then you must import and acquire stakes in international coal mines,” says TK Chatterjee, executive director at NTPC, which alone needs 126 million tonnes of coal a year. Company officials say NTPC’s requirement may rise to 300 million tonnes in seven to eight years’ time when it more than doubles its current output of about 31,000 MW.

To meet the sharp rise in demand of coal as it expands capacity, NTPC is seeking additional imports from mines in Mozambique and Indonesia.

The CIL official said that the existing shortage of coal for the power plants gets aggravated because coal utilities wait till the very end to order fresh shipments. “This eventually leads to a shortfall in power production,” he said.

CIL is firming up alliances with as many as 10 producers from the US, Indonesia and Australia for coal imports.

India, Asia’s thirds largest power producer, is likely to see a 21 per cent increase in coal imports. Analysts say demand will increase because factory output has increased by 17 per cent. This means India’s coal reserves, the world’s fourth largest, are simply not enough to meet demand.

Source : Tehelka