Coal imports by Indian power utilities registered a drastic fall in Jul’21, as the power producers reduced import bookings on the back of soaring coal prices.
Data provided by the power ministry showed that coal imports decreased 36% m-o-m to 2.09 million tonnes (mn t) in Jul’21 compared to 3.27 mn t in Jun’21. Notably, this was the lowest volume since Mar’17 (the period from which CoalMint has started tracking this data).
As per CoalMint’s assessment, Indonesian 4200 GAR coal prices jumped nearly 80% since the start of CY’21 and are currently assessed at USD 97.9/tonne (t) CNF basis.
Consequently, plants which utilise imported material for blending purpose have significantly lowered their purchases. Instead, they have resorted to domestic coal to fulfil their requirement.
In particular, nil imports were seen from the state run-power plants for the second consecutive month. Besides, imports by private sector plants were down 61% m-o-m to 0.43 mn t in Jul’21.
Central run-NTPC reported a marginal rise in imports at 0.17 mn t in Jul’21 from 0.15 mn t in Jun’21.
Overall imports for blending by plants fell by 52% m-o-m to 0.6 mn t in Jul’21.
Quantity in Million Tonne
Import based plants facing the heat
While power plants designed to run on domestic coal have an option to tide over the present situation, the same is not the case with the power plants designed to run on imported coal as they rely solely on imports.
These import-based plants have slashed their coal imports by 27% m-o-m to 1.48 mn t in Jul’21. Moreover, dispute over fixed price electricity contracts due to abrupt rise in coal prices has also forced the plants to cut back on power generation.
As per data provided by power ministry as on 4 Sep’21, two units of Adani Mundra power projects, each having capacity of 660 MW and four units of Tata Power’s Coastal Gujarat Plant, each having 800 MW capacity, are out of service for more than 15 days.
Notably, these two plants having a combined installed capacity of around 8,000 MW accounted for more than half of the total imports by power plants in the previous fiscal.
Implications
- Power outage caused by no generation from the import-based plants has gradually increased the load on remaining power units at a time when electricity demand has increased. This is the major reason for the abrupt drop in power plants’ coal inventories.
- As a result, Indian government was compelled to ask the plants to import coal in order to ensure uninterrupted power supply, having been critical of the costlier imports previously.
- Efforts are also in place to enhance coal supply to the plants facing acute coal shortage. So far, these measures have proven to be insufficient as coal stock at plants have fallen to a new low of 11.24 mn t as on 8 Sep’21, which indicates that the situation is expected to persist in the near-term.
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