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A Nil Imports Year Likely For Coal India

Date 10-December-2013
Subject A Nil Imports Year Likely For Coal India

Coal India Ltd is unlikely to import the fuel this fiscal. With just three months for the financial year to end, the public sector miner has not received a single ‘firm commitment’ from any power company asking it to provide imported coal.

“Coal India is ready for imports if asked by the power sector buyers under the fuel supply agreement (FSA). We have asked them; not a single company has given firm commitment till now,” a senior company official told Business Line.

According to the latest FSA, the company will offer 65 per cent domestic coal for 2013-14 and 2014-15; 67 per cent for 2015-16 and 75 per cent for 2016-17 to the annual contracted quantity (ACQ).

To meet the balance FSA obligation (15 per cent), Coal India may import coal and supply the same to willing power producers on a cost-plus basis. The power producer can also import coal by itself. The miner is sealing FSAs with 78,000 MW of power plants.

If power firms are not seeking imported coal, it is mainly due to lower electricity demand and improved domestic supplies, say industry watchers.

India is seeing a fall in overall electricity demand. For example, in October 2013, demand was 80,458 million units, down 6.35 per cent from 85,922 million units in October 2012.

However, the trend reveals that electricity deficit is reducing at a faster rate than the decrease in demand. This means power stations are running at lesser plant load factor (PLF), resulting in lower fuel demand. The overall PLF in October 2013 came down to 61.85 per cent from 71.04 per cent in the corresponding month the previous year.

Second, some of the power utilities such as those r un by NTPC and Tamil Nadu Electricity Board import coal themselves. In June, the Cabinet Committee on Economic Affairs gave its go-ahead for a mechanism that allows power generators to pass through to distribution utilities the cost of expensive imported coal used by them.

Coal India reported a 2 per cent growth in supplies during April-November at 292.9 million tonnes against the same period in 2012. The public sector company had earlier said it is ready to import 4-6 million tonnes through MMTC and STC. It would charge around 2 per cent as service charge.

Source: www.thehindubusinessline.com

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