Coal India’s import substitution drive with 17 power plants

Coal India’s import substitution drive with 17 power plants

Coal India Ltd (CIL) has tied up with 17 power plants to drive import substitution, besides other measures that have helped it to push 71 million tonne (mt) of additional coal to consumers ending February this fiscal.

All the 17 power plants have an existing linkage with the miner. According to CIL, predominant among them was a robust 43.5 mt increase in e-auction bookings during April 2020 to February 2021, compared to the year ago period.

India’s coal imports dropped 29.7% to 48.84 mt in April to June this fiscal (FY20-21), and as of February 28, CIL could push an additional 71 mt with e-auction booking increasing by 43.5 mt during April to February this fiscal.

Besides the agreement with 17 power plants for taking indigenous coal replacing imported coal, the company offered additional coal to the non-regulated sectors against fuel supply agreements of up to 100% of annual contracted quantity (ACQ).

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Trigger level for the power sector increased from 75%-80%, and ACQ for power plants was enhanced to 100% of normative requirement from 90%. Additional coal was allocated to state and central generating companies under the flexi utilisation policy, enabling them to reduce coal imports.

The company waived off performance incentive to the consumers of the power sector, for the supply of coal beyond the trigger level since the beginning of the fiscal year. This enabled the consumers to opt for additional quantities of coal at a lower cost from CIL.

Power sector consumers, among the many, who were provided coal under these measures included Adani Power, Calcutta Electric Supply Corporation (CESC), GMR Group and Andhra Pradesh Power Development Corporation (APPDC). Non-regulated sector consumers include Tata Steel BSL Vedanta, NALCO, Jindal Steel and Power Ltd (JSPL) and Hindalco Industries.

Bookings under the special forward auction meant exclusively for power sector consumers at 33 mt during April 2020 to February 2021 logged 27% growth over last year’s same period. The increase in real terms was 7 mt against 26 mt last year.

Imports by domestic coal based power plants at 9 mt declined by 55% till January 21 compared to 20 mt during the same period last fiscal.

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Also read: CIL’s production and offtake remained subdued in February

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