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India raises coal import by 35% to aid power plants

After a dip in power generation owing to shortage of coal, thermal power plants across the country may get back to normal generation soon as the Central Electricity Authority (CEA) has increased coal import from 54 million tonnes to 73 million tonnes, an increase of 35% for the current fiscal.

The coal being imported will be used to supplement domestic coal. NTPC has been permitted to import 22 million tonnes, the highest among all power companies, followed by Maharashtra State Power Generation Company (5.2MT) and Tangedco (5MT).

NTPC has 17 plants, which use coal as fuel and its combined capacity is 33,675MW. The other companies, which have been permitted to import coal include several private thermal plants like Reliance, Vedanta and Bajaj Energy as well as state-owned power generating and distribution companies. There are also other plants that have been permitted to import coal in small quantities. NTPC is a partner in some of them.

In 2015-16, coal demand for generating power is expected to be 787.03 million tonnes. Permission to import coal is given to plants that blend domestic and imported coal to fuel the furnace. There are also plants which operate only on imported coal, which have high calorific value and yield higher output than domestic coal.

Indian power companies mostly import coal from Indonesia, South Africa and Australia. While Tamil Nadu imports coal to fire its plants across the state from Indonesia, Maharashtra imports coal from South Africa.

“The target set by CEA is sufficient for all plants to meet their demand along with the locally mined coal,” said former NTPC chairman T Sankaralingam. For states like Tamil Nadu, money spent on transporting coal internally may be costlier than importing coal. But imported coal may become expensive if its price goes up along with crude oil, he said.

Most of the 37 companies for which CEA has given import clearance will get more allocation compared to last year. For example, Tamil Nadu was allotted 4.5 million tonnes for 2014-15 and it has been increased by 0.5MT in 2015-16. Tangedco imports coal through Ennore and Tuticorin ports.

The recent Union budget was a disappointment for private power producers, which had sought customs duty relief on imported coal for thermal plants. The association of private power producers said the levy would “increase the cost of electricity generation and burden common man through tariff hike”. At present, coal imports attract 2% basic customs duty and countervailing duty each.
Source: TNN