Coal imports by Asia’s third largest economy had risen temporarily in September this year as power generating companies stocked up the fuel ahead of winter.
New Delhi: Imports of thermal coal, used for generating electricity in power plants, in India will continues to fall amid the rise of renewable energy generation and aiding the global subdued outlook for coal prices, research and credit rating agency FitchRatings said today.
“We expect India’s thermal coal imports to continue to fall as the government maintains its push for self-sufficiency and as renewable energy output increases. This is amid lower-than-expected demand because of reduced off-take from financially stressed power distribution companies and subdued industrial performance,” the US-headquartered firm said in a report.
It added that coal imports by Asia’s third largest economy had risen temporarily in September this year as power generating companies stocked up the fuel ahead of winter.
Globally, the benchmark Newcastle 6,000 Kilocalorie per Kilogram coal price had hit a 9-month peak of $101.8 per tonne in August on increased demand in northern Asian countries and strikes at some key coal mines in Australia. The benchmark has since then retreated to $95.2 per tonne. The price is likely to witness limited upside from this level as China releases domestic supply and curbs coal consumption in polluted areas.
In India, thermal power plant utilization has declined by 60 basis points to 54 per cent in the current financial year and the low level of utilization is expected to continue despite a temporary increase in the last few months.
“Fitch expects renewable energy to fuel a large portion of India’s electricity generation. Tariffs for wind electricity, along with solar, hit a new low of under Rs 3 per unit in mid-2017 – making both the cheapest sources of electricity in the country,” the report said.
India’s import of coal fell 6.37 per cent to 191.95 million tonne (MT) in 2016- 17 after higher production by Coal India, which saw the country move to a position of surplus coal. In 2015-16, coal imports stood at 203.95 MT, according to official data.