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Coal demand is expected to increase seven per cent every year to touch 981 million tonnes (mt) in the next four fiscals. This will be largely fuelled by the sharp increase in demand from the power sector, said IMaCS, a development consulting firm.
Power utilities will account for 682 mt of coal, accounting for 70 per cent of the forecast demand. The projected demand from the power sector will touch about 75 per cent, including demand of 56 mt from captive power plants. Demand from the steel sector is forecast to touch 67 mt, accounting for seven per cent of total demand.
Coal-based plants account for about 57 per cent of India’s electricity generation capacity. Overall coal consumption jumped six per cent to 635 mt in FY’12 with the power sector accounting for 72 per cent, followed by steel and cement makers, at 11 per cent and five per cent. These three industries account for 87 per cent of total coal demand.
PRODUCTION
Domestic coal production has increased at a five-year compound annual growth rate of 4.6 per cent to 540 mt in FY’12. With the demand from power plants growing at seven per cent annually, the demand-supply gap may touch 266 mt in FY’17, said IMaCS.
Over the last few years, the increase in production has come almost entirely from non-coking coal. Production of coking coal has increased at a low rate mainly because of lower production by Coal India, it said.
IMPORTS TO GO UP
Coal imports have seen a steady increase due to lower production, inferior quality and inadequate availability of coking coal. Imports have touched 101 mt in the last fiscal and accounted for 16 per cent of domestic consumption in FY’12, as compared to 7 per cent in FY’03.
Though coal needs will continue to be largely met domestically, the share of imports in domestic demand is forecast to increase to 27 per cent in FY’17. The import could comprise of 35.5 mt of coking coal and 230 mt of thermal coal. Import demand would be primarily be accounted for by power utilities (190 mt) and steel (36 mt).
>suresh.iyengar@thehindu.co.in
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