India’s thermal coal imports rose more than 11 per cent m-o-m and almost 10 per cent y-o-y to hit 13.69 million tonnes (mt) in September 2023 aided by rising power demand and government’s mandate of blending 4 per cent imported coal.

A senior government official pointed out that power demand has been appreciating consistently due to rising industrial activity and higher demand from households, which further got support from hot weather last month leading to higher requirement for cooling.

“Going ahead, imports are likely to be higher or at par in October compared to September. This is being supported by coal importing mandate and rising industrial activity,” he added.

Also read: Cabinet approves transmission system for 13 GW RE capacity in Ladakh

According to energy intelligence firm Kpler, Indian thermal coal imports climbed to a three-month high of 13.69 MT in September, up by 9.90 per cent y-o-y.

Coal imports

Kpler’s Lead Major Dry Bulks Analyst, Alexis Ellender attributed the higher imports to issues with domestic coal supplies and lower hydropower output.

Growth in steam coal imports was primarily met by increased shipments from Indonesia (up 3.17 per cent y-o-y to 8.46 MT) and South Africa (up 104.36 per cent y-o-y to 2.21 mt), he told businessline.

“The outlook for thermal coal imports is heavily dependent on developments in domestic supply and the weather. Heavier-than-expected monsoon rains may have caused some disruption to coal transportation in September. This should ease as rains retreat; however, there are also underlying long term issues relating to investment and modernisation of the coal transportation network that are unlikely to change in the immediate future,” Ellender explained.

Also read: Limited lithium resources a hurdle in EV adoption: Power Minister

As the Southwest Monsoon retreats, regions of India are expected to experience a resurgence of hot weather conditions. The India Meteorological Department (IMD) forecasts a likelihood of upcoming “October heat” in parts of Northwest India where the monsoon has fully retreated, he added.

Combined with low coal stockpiles at national power plants (down 21.54 per cent m-o-m and down 9.86 per cent y-o-y) at the end of September), and the dispatching problems , this is likely to support thermal coal imports in October.

“Our expectation is that thermal coal imports will remain robust in October before easing in November and December as domestic production ramps up,” Ellender projected.

Power demand

Pan-India power consumption rose almost 11 per cent y-o-y to 140.49 billion units (BU) in September this year largely due to rising industrial and personal consumption. The hot and humid weather also led to more demand for cooling thereby increasing demand. 

According to the Central Electricity Authority (CEA), power sector consumed 5.58 mt imported coal in September 2023 against 5.03 mt in the same month last year, while during the April-September period in FY24, the number stood at 27.78 mt against 34.30 mt a year-ago.

The consumption and receipt of coal last month as well as during the April-September period in FY24 rose reflecting on the higher demand for power as well as higher supply.

Also read: Govt releases guidelines for procurement of wind power

In September 2023, domestic coal receipts stood at 59.9 mt (53.5 mt in September 2022), while in April-September FY24, domestic receipts stood at 381.4 mt (April-September FY23: 354.8 mt).

Domestic thermal power plants consumed 71.4 mt coal in September 2023 against 61.7 mt a year-ago. During April-September FY24, TPPs consumed 422.2 mt against 389.3 mt in the same period last fiscal year.

As of September 30, coal stocks at domestic coal based (DCB) power plants stood at 21.70 MT against a daily requirement of 2.6 mt.

TPPs ran at a plant load factor (PLF) of 69.25 per cent last month against 60.23 per cent in September 2022. Power generation during the month stood at 108,697.62 gigawatt hour (GWh) against 93,295.94 GWh a year-ago.

Ellender noted that national daily peak power demand set a new record in September of 239.98 gigawatt (GW), surpassing August’s peak of 238.19 GW and Power Ministry’s projection of 229 GW.

Related Topics