Chennai: India has urged the utility to import coal even though it has the fourth largest reserves in the world, with some power plants on the threshold of running out of fuel because of a surge in power demand.
Coal fuel power accounts for more than 70% of power plants.
Electric generation forms three quarters of coal consumption.
“Thermal power plants, which can import coal to integrate, can explore (ways) to increase coal imports to install during the current crisis,” the Ministry of Strength said in the August 30 notice seen by Reuters.
Data from the Central Electric Authority shows more than half of 135 coal power plants have a supply of coal which is less than one week, where 50 plants have less than three days on the left.
Six plants run out of coal.
Overall the electricity generation rose 16.1% in August, while coal-fuel output rose 23.7% from the previous year, Reuters analysis of the daily load delivery data by the Federal Postoco grid regulator showed.
India, the second largest coal importer in the world, mainly imports from Indonesia, Australia and South Africa.
The government has tried to cut import.
Increased use of coal in the first eight months of 2021, coal fuel plants jumped 19.3%, faster than 14.5% growth in renewable energy generation, POSOCO data showed.
The share of coal making in the period rose to 72.9%, in line with the level of 2019 but above 69.2% in the same period in 2020.
The overall use of power falls in 2020 in the middle of the coronavirus lock but has soared because the restrictions have subsided .
A power ministry official said the installation of new renewable resources was slower than expected, when power demand rose more 13%.
Trading volume in India Energy Exchange (IEX) rose 74% to a monthly record in August.
“The high cost of imported coal and LNG and lower wind power plants cause an increase in electricity prices,” IEX said in a statement.
Imports of LNG and Petcokecoal with Utilities rose 3.4% in the June quarter, while LNG imports fell with fourth import and Parden fell with the third, government data showed.
Traders say lower LNG delivery by utilities and petcoke is encouraged especially at higher prices, further encouraging coal imports.
Vasudev Pamnani, Director of Lavi Coal consultation, said he estimated imports to return to the pre-pandemic level at the end of the year.
“The absence of new investments in coal mining and the closure of many mines around the world has pushed prices,” said Pamnani.
However, higher prices can burden the import of Indian coal.
For example, coal prices of better US origins in the North Indian retail market have increased by around 80% from the same time last year, according to the online coal market based in Delhi.
“In the next few months, the increase in coal prices and petcoke from foreign origin is likely to encourage cement companies to buy Petcooke from domestic refiners,” Kirit C Gandhi, the President together in the Indian cement company said.