(India) -- India may soon face a severe shortage of coal due to the dwindling domestic production. The country may soon have to rely on long-term coal imports to meet the fuel shortage.
Power producers like NTPC are already meeting domestic coal shortages with imports. Therefore, they have not shown any urgency to get into long-term import contracts.
The Indian power utilities are currently mixing imported coal with domestic coal for their use in a certain specified ratio. These utilities may therefore face a problem if the supply of domestic coal dwindles further.
Power plants could also face difficulty in using 100% imported coal as the sizing of boilers in India is different and only a few can take 100% imported coal.
The Planning Commission has given a suggestion that the Indian utilities should import coal under long-term contracts to meet domestic coal shortages for their power plants. This would also assist in port developers upgrading their existing facilities for handling imported coal in the future.
Harry Dhaul, director general, Independent Power Producers Association (IPPAI) applauded the suggestion of the Planning Commission.“This is a good suggestion from the Planning Commission. A certain percentage of coal import should be made under long term contract while the balance can be sourced under short contract,”
“This will take care of volatility in the international coal market,” Dhaul said.
Indian utilities, however, are not keen to plan long-term coal imports to meet fuel shortages for their power plants. Rather, they are relying on public sector producers like Coal India Ltd (CIL) for fuel security.
Meanwhile, the government has planned several coal-based power generation capacity addition programmes to overcome the country’s rapidly increasing power shortage. That would mean a subsequent rise in the Indian power sector’s coal requirement in the coming years.
With the domestic coal producers already struggling to meet the domestic demand, power utilities will then have to depend on coal import to fulfill the government’s ambitious plans.