Country's largest power producer, NTPC, desires to trim its
coal imports from 10% of its annual fuel requirement to keep production costs
under check, said its chairman.
40,000 megawatt thermal power producer has a coal requirement of 164 million
tons in the current fiscal year to end-March and has already contracted to
import 16.4 million tons of coal, a third more than the 2011-12 fiscal year.
“10% of our entire requirement is now being imported, but we would like to
reduce it as it increases the cost. It doesn't help the country,” Arup Roy
Choudhury, who is also the managing director of the state-run utility, said.
Imported coal costs almost 50% more than the equivalent local coal supplied by
state-run miner Coal India Limited (CIL), which produces nearly 80% of the
domestic coal supply.70% of power generated in India is from burning coal.
Choudhury said his hopes of trimming imports hinge on the availability of more
domestic supplies in the next few years from Coal India and private players as
well as from the captive coal blocks allocated to the utility.
“We are expecting Coal India to increase its production. We are expecting
other people (private producers) to come in,” he said.” The (captive) blocks that we have will give out 40 million tons by the end of (March) 2017.
But by that time, our demand requirement will be 200 million tons of coal. So
we get still only 20% of what we require from the mines that we have.”
NTPC which aims to increase its capacity to 51,052 MW by end of March 2017 obtains
the bulk of its coal through long-term fuel supply agreements (FSA's) with Coal
India. The utility has delayed signing a new supply contract for 4,500 MW with
the miner, citing quality issues.
“There are certain issues which we are sorting out with Coal India. Of
40,000 MW, only 4,500 MW is the new FSA. The rest are working on the old
FSA,” Choudhury added.
India has about 118 billion tons of coal that could be mined but manages to
produce only about 600 million tons annually, he said.
Coal India, the world's largest coal miner, is under pressure from the
government and power producers to ease fuel shortages at home but has struggled
for years to raise output due to problems in obtaining environmental and
regulatory approval.
“In the last five years, the CAGR (compound annual growth rate) of India's
power sector has been close to 10%, while that of Coal India has been reduced
to minus 1,” Choudhury said.
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