Adani Enterprises wins key coal tender as India acts to avoid energy crisis

Adani Enterprises Ltd. has won a contract to supply overseas coal to India’s top electricity generator as the nation aims to avoid a repeat of last year’s energy crisis. 

Adani, India’s largest trader of imported thermal coal, will deliver 1 million tonnes of coal to state-run NTPC Ltd. In October 2021, NTPC had issued its first tender for coal imports in more than two years.

Kolkata-based Damodar Valley Corp. Ltd., also state-owned, is examining a proposal from Adani for the supply of the same volume to its power plants. 

Indian power producers are under pressure to bolster coal stockpiles after supply disruptions and rising demand left the country grappling with shortages in the second half of 2021, leading to outages in some provinces and curbs on energy-hungry industries. 

The decision to purchase coal from overseas comes despite the government’s commitment to reduce reliance on fuel imports. Coal accounts for about 70% of India’s electricity generation, and consumption is forecast to rise in the next few years, even as Prime Minister Narendra Modi makes a huge push to add renewables.

Last month in December 2021, Adani began shipping the first export cargo from its controversial Carmichael coal mine in Australia. The shipment is believed to be headed to India. Benchmark seaborne coal prices hit a record in October 2021. However the price has since pared those gains, helping to boost the case for imports.

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