In October, 56 thermal power stations had less than seven days' critical coal stocks, the Central Electricity Authority said on its website. Coal shortages forced NTPC to shut two units for a fortnight in July.Thermal plants account for two-thirds of India's power generation capacity of 145.6 gigawatts, which lagged demand by 15 percent in September.
"Our board on 28-11-2008 approved a formula for importing 8.25 million tonnes of coal this fiscal, linking the prices with the weighted average of international indices -- South African API-4 coal, the Newcastle index and the Barlow Jonker Index," a company official said. A top government official also confirmed NTPC would import coal with linkages to its own formula, rather than fixed prices.
The NTPC official said the new formula was suggested by the State Trading Corp (STC), which will source the coal for NTPC.
In September, STC issued a tender to buy 8.25 million tonnes of coal, in which Singapore-based trader Adani emerged as the lowest bidder, quoting a price of $170-$180 a tonne. But since then the prices of 6,200-6,300 gross calorific value coal have fallen to as low as $100 a tonne.
"When STC opened the bid, the market price was high but soon after that, in 10 days or so, coal prices started moving downward," another NTPC official said.
"So in the national interest we asked STC to see and explore how the prices can be brought in sync with market...bring down the prices. Some shipments have already arrived but the bulk of the contracted quantity is yet to arrive," he said, adding that the firm would pay the prices according to its formula.
Coal shortages have also forced state-run monopoly Coal India Ltd to turn to global markets for the first time.Another state firm, MMTC Ltd, has floated a tender on behalf of CIL to buy up to 10 million tonnes of coal this fiscal year.India's coal imports have risen from a few million tonnes in 2003 to a projected 50 million tonnes for 2009.Coal India Ltd and another state firm, Singareni Collieries Co Ltd, produced 37.3 million tonnes of coal in October 2008 against a target of 37.7 million.
Courtsey - Reuters India