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NTPC invites 2 million tonne coal import tender

NTPC plants will use 1 MT imported coal, and the tender for the remaining volume has been floated on behalf of the power plants of Damodar Valley Corporation (DVC), jointly owned by the Centre and the state governments of Jharkhand and West Bengal.

State-run power generation company NTPC has invited tenders to import 2 million tonne (MT) of coal, soon after the Centre asked power plants to step up imports of the key fuel for thermal power.

NTPC plants will use 1 MT imported coal, and the tender for the remaining volume has been floated on behalf of the power plants of Damodar Valley Corporation (DVC), jointly owned by the Centre and the state governments of Jharkhand and West Bengal.

Although the specific timelines for the imports are not mentioned in the tender document, sector experts said the procurement is not likely to start immediately as coal imports from Thailand, Australia and South Africa — the main coal exporters to India — are currently up to three-four times costlier than domestic coal.

NTPC imported 0.5 MT coal in Q1FY22 against 0.2 MT imported in the corresponding quarter last year. Its overall coal consumption in the quarter increased by 14.6% to 46.3 MT. NTPC’s captive mines produced 2.5 MT of the fuel in Q1, marginally higher than 2.4 MT in the same period in FY21.

In a tacit acknowledgment of the crisis being faced by the country’s power sector owing to paucity of coal, the government decided that power plants could use up to 10% of their fuel requirement through imported coal, which would be blended with domestic coal.

At the current high international rates of around Rs 12,000 per tonne, even 10% blending of imported coal is likely to increase electricity generation cost by `0.50-0.75 per unit, which is 13-19% of the average power purchase costs paid by power distribution companies.

Of the 209 gigawatt (GW) installed coal-based power plants, around 90 GW currently import coal for power generation. About 72 GW of this capacity imports coal for blending with the local variant, while 18 GW are designed to run specifically on imported coal.

The government, in April 2020, had asked thermal power plants to reduce coal imports and “make best efforts to replace their imports with domestic coal”.
Source: Financial Express

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