Annual coal imports from NTPC, India’s largest utility provider, set to hit 8-year high

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NEW DELHI, April 5 (Reuters) – Coal imports by India’s top power producer NTPC Ltd (NTPC.NS) this financial year will be the highest in eight years despite near-record prices, two senior company officials said. . remedy a domestic shortage.

The utility, which produces more than a quarter of India’s power generation, will import 16 million tonnes to blend with domestic coal in the year ending March 2023, officials said. .

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“The Indian government has ordered us to import 16 million tonnes, and we will do so to ensure the country’s energy security,” one of the officials said.

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The rise in imports reflects strong growth in electricity demand as India’s economy recovers from the pandemic and forecasts of a particularly hot summer.

India’s federal government has ordered all utilities to cumulatively import around 33.5 million tonnes for blending during the year, the second official said, the highest for at least six years.

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Rising imports from India could put further upward pressure on global coal prices, which hit record highs in March following Russia’s invasion of Ukraine – the biggest supplier from Europe. Prices have since cooled, but are still well above average levels in 2021.

India is the second largest importer of coal in the world and counts Indonesia, Australia and South Africa among its major suppliers. Details on plans to import coal from India have not previously been released.

India’s power generation grew at its fastest pace in three months in March, due to above-normal temperatures for the month and increased activity following the easing of COVID restrictions, while power outages hit their highest level since October.

State government run utilities were asked to import 8.75 million tons in this fiscal year, private utility operators were asked to buy 6.22 million tons while other Federally-run utilities will import 2.53 million tonnes for the blend, the second official said.

The NTPC has already awarded contracts for the purchase of almost 7 million tonnes, the officials said, adding that it all came from Indonesia at slight premiums over reference prices.

NTPC did not immediately respond to a request for official comment.

HIGH ENERGY DEMAND

Rising electricity demand has forced India to cut coal supplies to the non-electric sector and put some fuel auctions on hold, despite record production and supply from the state-owned company Coal India Ltd (COAL.NS), which produces more than 80% of India. coal.

Some of India’s non-power sector consumers, who largely use electricity generated by utilities not connected to the national grid, also draw expensive electricity from the national grid, adding to the pressure on utilities to low stock of coal.

The surge in imports reflects the extent of India’s coal shortage as summer approaches, when electricity demand typically peaks due to increased air conditioning demand and intensified heat. industrial activity.

“We have done everything. National coal production has increased. The whole crisis is due to the closure of imported coal-fired power plants and gas-fired power plants,” the first official said.

Nine of the country’s 23 imported coal-fired power plants are closed and most gas-fired power plants are either not operating or at lower capacity, according to government data, as industry officials say high global coal prices fuel have made these plants too expensive to operate at full capacity.

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Reporting by Sudarshan Varadhan; Editing by Susan Fenton

Our standards: The Thomson Reuters Trust Principles.

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