India asks utilities to import coal due to limited supply as demand increases

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  • India’s power generation in August grows 16.1% year-on-year, up 2.9% from July
  • India’s coal-fired power generation in August grew 23.7% yoy, up 4.4% m / m
  • The increase in coal-fired electricity generation has led to a coal shortage

CHENNAI, Sept.1 (Reuters) – India urged utilities to import coal as coal-fired power generation increased in Asia’s third-largest economy after coronavirus restrictions eased, multiple power plants being about to run out of fuel.

India is the second largest importer of coal despite its fourth largest reserves in the world, and coal supplies more than 70% of the country’s electricity demand. Electricity production accounts for three quarters of India’s coal consumption.

“Thermal power plants, which can import coal for blending, could explore (ways) to increase coal imports to overcome the current crisis,” the Federal Energy Ministry said in an Aug. 30 advisory. by Reuters.

Global power generation rose 16.1 percent in August, while coal-fired power generation rose 23.7 percent from a year earlier, Reuters analysis of shipping data showed. daily load by the federal regulator of the POSOCO network.

Data from the Central Electricity Authority showed that more than half of the 135 coal-fired power plants had less than a week of coal supply, of which 50 plants had less than three days of coal. Six power plants ran out of coal. Read more

India imports mainly from Indonesia, Australia and South Africa. The government is trying to reduce imports.

India also asked Coal India (COAL.NS) to prioritize supplying thermal power plants with low stock and ship fuel from mines with plentiful stocks to alleviate the shortage.

The state mine’s coal supply, which accounts for over 80% of India’s coal output, increased 9.5% in August from a year ago, but fell by 3 , 8% compared to July.

INCREASE IN COAL CONSUMPTION

In the first eight months of 2021, coal-fired power generation jumped 19.3 percent, faster than the 14.5 percent growth in renewable power generation, according to data from POSOCO.

Reuters Charts

The share of coal-fired power generation during the period increased to 72.9%, in line with 2019 levels but above the 69.2% in the same period of 2020. Global consumption d electricity fell in the first half of 2020 amid coronavirus shutdowns, but increased after restrictions were relaxed.

Reuters Charts

An Energy Ministry official said the installation of new renewable energy sources had been slower than expected, at a time when demand for electricity had increased by more than 13%.

Trading volumes on the India Energy Exchange (IEX) rose 74% to a monthly record in August.

“The high cost of imported coal and LNG as well as the decline in wind power generation have resulted in higher electricity prices,” IEX said in a statement.

LNG AND PETCOKE

Imports of coal by utilities rose 3.4% in the June quarter, while imports of LNG fell by a quarter and imports of petroleum coke fell by a third, according to the reports. government data.

Traders say the drop in shipments of LNG by utilities and petroleum coke is mainly due to rising prices, which has further increased imports of coal.

Vasudev Pamnani, director of consultancy firm Lavi Coal, said he expected imports to return to pre-pandemic levels by the end of the year.

“The lack of new investment in coal mining and the closure of many mines around the world have pushed up prices,” Pamnani said.

However, higher prices could weigh on Indian coal imports.

“Over the next few months, high prices for coal and petroleum coke of foreign origin will likely push cement factories to buy petroleum coke from domestic refiners,” said Kirit C Gandhi, co-chairman of Indian cement plant Shree Cement.

Reporting by Sudarshan Varadhan; Editing by Edmund Blair, Bernadette Baum and Mark Potter

Our Standards: Thomson Reuters Trust Principles.

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