NTPC to increase coal imports to avoid power shortage

01 Jan 2022

National Thermal Power Corporation (NTPC) Limited plans to increase coal imports to avoid the nation's power shortage. According to sources, NTPC has sought about 10 million tonnes (mt) of overseas coal as it issued its first international tender in two years in October.

The company focuses on securing cargoes starting from April when the power consumption in India increases in summer.

Indian power producers are returning to the seaborne coal market as they rebuild stockpiles after the coal crisis, ignoring high coal prices and assurances that domestic miners will increase coal output. While there is a reverse to the government's proposal to prioritise local production, it should help in avoiding any repeat of 2021's crisis when reserves dwindled to just a few days of coal supply.

Earlier, NTPC agreed to buy 1 mt of overseas coal from Adani Enterprises Limited and also published tenders, including one tender for 5.57 mt.

Vice President of Elara Capital India Private Limited, Rupesh Sankhe, said that the tenders indicate that it expects strong power demand to keep its supply open. They also had quality issues with Coal India Limited (CIL), and imports may be a way to increase that risk.

NTPC and its joint ventures (JVs) have a generation capacity of about 68 GW, from which 83% is fired by coal. It is India's largest consumer of fossil fuel, burning 170 mt per year, the fifth of the country's total burning.

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