India's coal import strategy shifts as power plants adapt to domestic supply surge, marking a 44.3 per cent drop in blending imports

India's reliance on thermal coal imports for blending has witnessed a significant downturn, with a 44.3 per cent year-on-year decrease, totalling 15.16 million metric tons from April to November in the current fiscal year.

As per S&P Global, despite this reduction, the country experienced an 11.2 per cent surge in coal-based power generation during the same period, reaching 779.1 billion units.

The decline in coal imports can be attributed to increased domestic coal production, reflecting the country's diminished appetite for international coal.

The federal coal ministry reported the substantial drop in coal blending imports, signalling India's efforts to leverage its boosted domestic coal output.

Notably, power generated by domestic coal-based plants surged by 8.4 per cent year-on-year, emphasizing the nation's commitment to meeting its energy needs through enhanced domestic production.

India's overall power generation witnessed a robust 7.71 per cent growth from April to November, a notable achievement attributed to various factors.

The surge in power demand was fueled by an unprecedented rise in temperatures, delayed monsoons in the Northern region, and the resumption of full commercial activities post-COVID.

This combination of factors led to an increased demand for electricity, prompting a significant upswing in power generation across the country.

In response to the heightened power demand, India extended its directive for import-dependent coal power plants to operate at full capacity until June 2024.

This decision was made due to the confluence of rising power demand and insufficient domestic coal supply.

To bridge the gap, generating companies were mandated to blend at least 6 per cent of imported coal until March, a measure aimed at ensuring a smooth transition between coal receipt and consumption.

Despite the overall reduction in coal blending imports, November saw a slight uptick, with coal imports by coal-based power plants rising just above 85 per cent year-on-year to reach 5.9 million metric tons.

This surge aligns with India's recent industrial growth, prompting increased electricity demand.

It's worth noting that India's move to put 26 commercial coal mines under auction in its ninth round of commercial coal block allocation on December 20 signifies the nation's commitment to boosting domestic coal output and attracting private investments in the sector.

This strategic initiative aligns with India's broader goal of achieving self-sufficiency in coal production and reducing dependency on imports.