Coal imports this financial year by NPTC, India’s top electricity producer, will be the highest in eight years despite near-record prices, two senior officials at the company said, as it looks to address a domestic shortage.
The state-run utility, which produces over a quarter of India’s power output, will import 16 million tonnes of coal to blend with domestic coal during the year ending March 2023, the officials said.
“We will be doing it to ensure the country’s energy security,” one of the officials said.
The rise in imports reflects strong growth in demand for power as India’s economy recovers after the Covid-19 pandemic and forecasts for a particularly hot summer.
India’s federal government has directed all utilities to cumulatively import about 33.5 million tonnes for blending during the year, the second official said, the highest in at least six years.
Higher imports by India could put further upward pressure on global coal prices, which touched record highs in March in the wake of the invasion of Ukraine by Russia – Europe’s biggest supplier.
Prices have cooled since, but are still much higher than average levels in 2021.
Second Largest Coal Importer
India is the world’s second largest coal importer, and counts Indonesia, Australia and South Africa as its major suppliers.
Power generation surged at its fastest pace in three months in March, due to higher than normal temperatures for the month and increased activity following the relaxation of pandemic restrictions, while power cuts hit the highest level since October.
State government-run utilities have been asked to import 8.75 million tonnes this financial year, private utility operators have been directed to buy 6.22 million tonnes while other central government-run utilities will import 2.53 million tonnes.
NTPC has already awarded contracts to procure nearly 7 million tonnes, the officials said, adding that all of it has been sourced from Indonesia at slight premiums to benchmark prices.
NTPC did not immediately respond to a request seeking official comment.
- Reuters, with additional editing by George Russell
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