Indian utilities’ coal imports jumped 21% last year, rebounding after a three-year slide mainly due to increased purchases by an Adani Power plant in western India, government data showed on Wednesday.
Imports rose to 69.51 million tonnes, the highest level since 2015, data from the Central Electricity Authority showed. Utilities account for more than 75% of India’s annual coal demand.
Adani’s “Ultra mega” power plant in Mundra, Gujarat state, accounted for a quarter of the imports last year, with its shipments rising 75% to 17.35 million tonnes. The plant started increasing shipments after India’s Supreme Court in October 2018 allowed it to pass on higher costs due to a rise in prices of Indonesian coal.
Coal imports by the Mundra plant had fallen in 2017 and 2018 as the project was operating below full capacity and the company booked losses because power purchase agreements did not allow it to pass on the increase in fuel costs. Utilities’ overall imports of thermal coal for the 10 months to October rose 12.6% to 163.86 million tonnes, coal ministry data showed. Data for thermal coal imports for November and December have not yet been compiled.
Analysts expect overall imports of thermal coal from India, one of the world’s largest consumers of coal, to rise by more than 13% in 2019. Imports are rising despite India’s sharpest economic slowdown since the global financial crisis, as logistical challenges, heavy rains and frequent strikes and protests have hit output at state-run Coal India, which accounts for more than four-fifths of India’s coal production.
Utilities increased coal imports in 2019 despite electricity demand growing at the slowest pace in six years as the broader economic slowdown stifled industrial output. Federal government-run companies including NTPC Ltd increased imports four-fold to 3.61 million tonnes, the data showed.
Among utilities run by state governments, Tamil Nadu state-run TANGEDCO’s coal imports rose the most, with shipments almost doubling to 5.14 million tonnes in 2019.