Indian power plants continued to shy away from imports on soaring prices. This has further dented coal inventory levels, leading to supply tightness in the domestic market.
Data provided by the Ministry of Power showed that coal imports decreased 8% m-o-m to 1.92 million tonnes (mn t) in Aug’21 compared to 2.09 mn t in Jul’21.
Coal inventory at the power plants was reduced to critical levels at the end of Aug’21, and the elevated imported prices did not offer much help.
Notably, plants which utilise imported material for blending purposes significantly lowered their purchases. Such plants’ cumulative imports were down 28% m-o-m to 0.43 mn t in Aug’21.
Imports by private sector plants decreased 47% m-o-m to 0.23 mn t. Nil imports were recorded from the state run-power plants for the third consecutive month.
Growth in coal imports came from the central-run power plants, wherein NTPC registered a rise of 19% in monthly intake to 0.21 mn t.
Quantity in Million Tonnes
Import-based plants remain affected
Coal intake by import-based plants was seen almost unchanged m-o-m at 1.49 mn t during Aug’21, but the volume fell 47% y-o-y from 2.8 mn t in Aug’20.
Notably, the two mega power projects run on imported coal, that of Adani and Tata Power at Mundra, had to shut down their operations on dispute over fixed price electricity contracts.
As per data provided by the power ministry, only 1,460 MW out the combined total 8,620 MW installed capacity from these plants were operational at the end of Aug’21.
Total imports by these two plants decreased 24% y-o-y to 6.58 mn t during Apr-Aug’21 compared to 8.63 mn t in Apr-Aug’20.
The impact of higher prices also weighed on the intake of the Thamminapatnam and Muthiara plants which had cut their imports to nil during Aug’21.
Current scenario
The Indian government has asked the power plants to explore imports in order to tide over the situation. However, the surging coal prices have continued to be a major hindrance.
Consequently, power outages from such power units have compelled the remaining plants to raise their generation schedule, resulting in a continual fall in inventory levels.
As on 28 Sept’21, coal stocks at power plants (having coal linkages) were assessed at a new low of 8.23 mn t, sufficient for five days of power generation.
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