Coal India allies with power plants to substitute imports of coal

State-owned miner Coal India (CIL) has tied up with 17 power plants to drive import substitution, besides other measures that have helped it to push 71 million tonnes of additional coal to consumers ending February this fiscal, Financial Express reported. 

India’s coal imports dropped 29.7 per cent to 48.84 million tonnes in April -June this fiscal and as of February 28, CIL could push additional 71 million tonnes with e-auction booking increasing by 43.5 million tonnes during April-February this fiscal.

Besides inking pact with 17 power plants to replace imported coal with indigenous coal, the company offered additional coal to the non-regulated sectors against fuel supply agreements of up to 100 per cent of annual contracted quantity (ACQ). Trigger level for power sector was increased from 75-80 per cent and ACQ for power plants was enhanced to 100 per cent of normative requirement from 90 per cent. 

Additional coal was allocated to state and central generating companies under flexi utilisation policy, enabling them to reduce coal imports.

The company waived off performance incentive to the consumers of power sector, for supply of coal beyond the trigger level since the beginning of the fiscal. This helped the consumers opting additional quantities of coal at lower cost from CIL.

These coordinated efforts besides 43.5 million tonnes of increased bookings in e-auction, helped arrest the imports by 28 million tonnes. 

Power sector consumers, among the many, who were provided coal under these measures were CESC, Andhra Pradesh Power Development Corporation, Adani Power and GMR group. Non-regulated sector consumers include Vedanta, Jindal Steel & Power, NALCO, Hindalco Industries and Tata Steel BSL.

Bookings under special forward auction meant exclusively for power sector consumers at 33 million tonnes during April-February 2021 logged 27 per cent growth over last year’s same period. The increase in real terms was 7 million tonnes against 26 million tonnes last year.

Imports by domestic coal-based power plants at 9 million tonnes declined by 55 per cent till January 21 compared to 20 million tonnes during the same period last fiscal.

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