According to industry sources, NTPC-India’s largest power producer, is planning to issue a tender for import of 2.5 MnT of coal by mid-September to cater to the growing power demand in the country.
Gurdeep Singh, chairman and managing director of NTPC, said that the imports would be through a competitive bidding process. The coal will be utilised by our coastal power projects in Simhadri, Kudgi and Farakka,” he said.
According to industry estimates, the imports are likely to cost NTPC around INR 1,372 Crore with the coal price at USD 80/MT after discounts.
Indian power demand indicates a steady growth rate on the yearly basis. According to the tentative data provided by Power Ministry, country’s power generation from conventional sources grew 3.75% Y-o-Y to 421.31 BU in Apr’18-Jul’18.
“Overall, the power demand is growing every month and now it is moving to industrial sector as well, along with residential segment, which is a very healthy sign,” Mr. Singh added.
The power producer’s power generation in Q1 FY19 has increased 7.5% Y-o-Y to 69.2 BU, while the plant load factor (PLF) of the company at 77.9% has stayed way above the national average of 63%.
NTPC’s average tariff in April-June was INR 3.36 per unit. (The company did not disclose the average cost of power generation).
During the first quarter of FY19 (Apr’18-Jun’18), NTPC’s coal consumption grew around 17% Y-o-Y to 43.14 MnT. The major portion of the consumption was procured from the domestic supplies, which were recorded at 43.05 MnT during the period, rising 17% Y-o-Y from 36.84 MnT in Q1 FY18.
Coal share from imports fell by 36% Y-o-Y to 0.09 MnT in Q1 FY19.
Governments’ power drive and pertaining domestic shortage accord import demand:
NTPC’s reliance on imported coal has been significantly reduced by the fuel security provided by the Indian government.
Apart from receiving full coal allocation for its power plants, the power producer has also been awarded with Pakri Barwadih, Chatti-Bariatu, Kerandari, Dulanga, Talaipalli and Chatti-Bariatu (South), Banai, Bhalumunda and Mandakini B coal blocks. These mines carry total geological reserves of around 7.15 BnT and have a production potential of 107 MnTPA that can cater to requirements of 20,000 MW.
The cumulative efforts of these have resulted in a drastic fall in NTPC’s sourcing of imported coal. According to the data provided by power ministry, NTPC’s coal import has fallen 69% Y-o-Y to 0.318 MnT in FY18 (Apr’17-Mar’18) against 1.026 MnT in FY17.
NTPC’s joint venture power project with TANGEDCO- ‘NTECL’ (NTPC Tamilnadu Energy Company), had also seen import falling 84% Y-o-Y to 0.303 MnT in FY18.
However, in order to resolve its fixed cost under recoveries due to coal shortage and to address the country’s rising power demand, NTPC is likely to resort to imported coal.
“With access to electricity increasing, as Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY) and Saubhagya Scheme light up each and every house in the country by end-2018, the power consumption will increase further,” Singh said.
NTPC’s expected imported coal tender would further push Indian non-coking coal imports, which were recorded at 146.35 MnT in 2017, according to the data compiled by CoalMint.
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