August 19, 2020 Read More →

India’s largest utility says additional coal imports unlikely this year due to lower demand, renewables

Argus:

India’s state-controlled power utility NTPC is unlikely to seek any more imported coal during the current 2020-21 fiscal year ending 31 March.

The move follows projections of weaker electricity consumption given the Covid-19 pandemic and increased government efforts to discourage coal consumers, including utilities, from buying seaborne cargoes. “In this scenario, I do not think we will be issuing any coal import tenders at least in this fiscal year,” an NTPC official told Argus.

The utility, which accounts for about a quarter of India’s installed coal-fired power generation capacity, had earlier decided to defer receipts of most of the seaborne coal it has already tied up. The utility has still to take delivery of about 1.72mn t[onnes] of imported coal from a total 6.35mn t it contracted over 2019-20 and 2018-19, which should be enough to meet any short-term requirements, the official said. The decision may further weigh on India’s receipts of seaborne coal this year. The country’s coal imports were down by 1.54mn t from a year earlier to 10.11mn t last month, according to shipping broker Interocean. This was the fifth consecutive month of annual falls, although the rate of decline was much smaller compared with the second quarter of this year.

NTPC’s move underscores issues about sustaining the pace of recovery in national coal consumption, given the weak outlook for the country’s economic and industrial activity despite a partial easing of the national Covid-19 lockdown. Average coal-fired output in July was only 3GW lower against the previous year at 105GW. This was a significant recovery from 97GW a month earlier and 82GW in April when output fell by 25GW and 39GW on the year, respectively.

But firm renewables output weighed on the possibility of a stronger recovery in coal use. Overall national power output reached parity with a year earlier at 146GW in July. But coal’s share in the mix was squeezed by a 3GW annual increase in hydropower output, which rose to 24GW.

Even NTPC is planning to boost its renewables plans in line with the country’s drive to reduce its dependence on coal for electricity generation. The utility now wants renewables to account for at least 30pc of its projected installed capacity of 130GW by 2032, up from 25pc planned earlier, the company said yesterday. It reported a 5.9pc drop in profit from a year earlier in the April-June quarter to 29.49bn rupees ($395mn) because of weaker power generation. NTPC’s plan to sharply increase its renewables capacity is ambitious as only 1.7pc of its current generation capacity of 62.91GW is based on renewable energy, while about three-quarters of its projects under construction are coal-fired power plants.

[Saurabh Chaturvedi]

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