India’s largest power producer, NTPC, is gearing up to augment imported coal procurement in coming months to ensure fuel security during the peak summer.
The company mainly procures coal from domestic miners Coal India Ltd (CIL) and Singareni Collieries Company Ltd (SCCL) via long-term fuel supply agreements (FSAs). Besides, part of its domestic supply is met through captive blocks allocated by the government.
However, in view of soaring temperature in peak summer where coal demand is expected to shoot-up, the company has decided to import around 5.4 million tonne (mnt) of coal for its group stations during first half of next fiscal (FY2023-24).
This comes after the Ministry of Power (MoP) had directed the domestic coal-based plants to import coal for blending at the rate of 6% by weight so as to avoid outages arising from the shortfall in domestic coal supplies.
In a latest development, NTPC, has floated two separate tenders seeking a total of 2 mnt of imported coal. The bid process against these will begin with sale of tender document starting from 20 March, 2023, while the due date for bid submission is scheduled on 18 April, 2023.
It is expected that tenders for remaining volume will be rolled-out in batches, as was the trend seen last year when the country had faced similar situation.
Preparations in full swing
As per estimates of the Central Electricity Authority (CEA), peak electricity demand is expected to be 229 GW during April. Electricity demand was already the highest in February at 210 GW compared with anything seen in previous years.
To ensure adequate coal availability, CIL, has committed to supply 156 mnt of coal to the power sector during the April-June, 2023 quarter. This holds a nominal growth of 2% over the year-ago period. As a sign of preparedness, MoP has advised thermal power plants not to take any planned outage during April-May 2023. In addition, the government is keeping a tap on alterative power sources to compensate for the shortfall in coal-based power generation.
In this regard, a mechanism has been approved for an operationalisation of around 5,000 MW gas-based power plants for 18 days during crunch period (April-May 2023). Recently, a tender was floated for procurement of 4,000 MW electricity from gas-based plants.
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