After targeting to eliminate imports of substitutable coal by FY26, the coal ministry will now encourage imported coal-based power plants to make capital investments to run on domestic fuel.
The ministry is set to request power plants run on imported coal to make changes in technologies and design to be able to use domestic coal over the next two years.
“The country will have surplus coal in the next two years..,” Union minister for coal and mines Pralhad Joshi said on Thursday. He added that the government is trying to address the logistical and other issues in domestic coal production and transport, with a view to eliminating import dependence for coal varieties that are locally available.
The minister also said that the government aims at making domestic coal available at competitive prices vis-à-vis imported coal which has remained expensive for long. The lower prices for local coal is expected to be an incentive for power producers to switch to designs suitable for domestic coal usage.
Due to high ash content in the coal produced domestically, imported-coal based power plants are not able to use the indigenous coal and have to depend on imports.
There are 16 imported-coal based power plants in the country of which six reported having a critical stock as on January 24, latest data from the Central Electricity Authority showed. A plant is said to have a critical stock situation when the dry fuel is less than 25% of the normative (ideal) level.
The government has already charted out a plan to reduce the import of coal that is indigenously available to nil by FY26. This includes substitution of about 110 million tonne which is half of the total imports now through higher local production, coal secretary Amrit Lal Meena had earlier told FE.
India’s coal imports peaked in volume terms in FY20 at 249 million tonne (mt), while in FY23 also the inward shipments were quite high at 236 mt. The value of coal imports stood at a massive $48 billion last fiscal. Rising coal imports have made it another strain on the country’s current account, along with imports of crude petroleum and, of late, edible oils.
The country’s share of imported coal stood at 21% in FY23 against 26% in FY20, which includes coking coal and thermal coal.