NTPC seeks first coal imports in four years as supply issues bite
NTPC’s plants, accounting for more than half its total capacity, had less than seven days of coal stock as on 13 August
India’s largest power producer is seeking bids to import coal after a gap of about four years, highlighting a supply crunch users of the fuel are facing as shipments in the country fall short of demand.
State-run NTPC Ltd. is seeking a total of 2.5 million metric tons of imported coal, according to two separate tenders on its website. The company said in an email it last issued tenders for imported coal in 2014. It is looking to boost supplies as plants accounting for more than half its total capacity had less than seven days of coal stock as on 13 August, data from the Central Electricity Authority shows.
Production at Coal India Ltd., which produces more than 80% of the country’s coal, has failed to keep pace with rising demand, driven mainly by higher electricity generation. A congested railway network and a shortage of railway carriers to ship the coal add to the problem, forcing consumers from power plants to aluminum smelters to purchase the fuel from overseas or reduce plant utilisation.
“NTPC has faced coal shortages at some of its plants and imports can help plug the gap,” said Anuj Upadhyay, an analyst at Emkay Global Financial Services Ltd. “It shows the company’s preparedness for the coming months, when electricity demand is expected to grow even further after the end of the rainy season and the start of the festive season.” India’s electricity demand rose 5.6% from a year earlier in the four months ended 30 July, according to CEA data.
NTPC has sought coal with gross calorific value of not less than 4,700 kilo calorie a kilogram and has specified that the ash content should be a maximum of 20%, the bid documents show. The overseas shipments it’s seeking equal 4.4% of total imports by India’s power stations in the year ended 31 March, according to Bloomberg calculations based on CEA data. The last date for submission of bids for both tenders is 11 September.
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