NTPC, India's largest power producer and coal consumer, will not place any new orders for coal imports during the three months to September, marking the second successive such quarter owing to sufficient stocks at its thermal plants.

The company hopes to generate power with domestic coal at least till September, an official said, although at the beginning of the year NTPCBSE 0.15 % was looking at importing about 22 million tonne of coal. During 2014-15 it had placed orders for about 16 million tonne

NTPC's decision is in line with the government's target of achieving self-sufficiency in coal production and reducing imports of thermal coal to zero in the next four-five years.

Imported coal turns out costlier than the domestic variety because of logistics costs even as international prices of the commodity are falling. NTPC's decision not to import coal will result in lowering of cost of generating power and, therefore, lower tariffs.

"At present total coal stocks at NTPC power plants are close to one lakh tonne and with the supplies that thermal power plants are receiving despite the rains, we can comfortably tide over the monsoon till September. However, we will need to take a fresh look at the stock situation after September," said a senior NTPC official, who did not wish to be identified.

Coal imports are based on stock positions during a quarter and it takes several weeks for the coal to arrive, the official said. Import requirements are reviewed every quarter and depending on supply potential from state-run monopoly miner Coal India, orders are placed to international suppliers.

According to data provided by the Central Electricity Authority, coal stocks at power plants are enough for 25 days on average. There are just a few plants that have less than adequate stocks, because of payment issues or because they are new plants with logistics problems.

"NTPC intends to bring down its imports to zero in the next five years and if Coal India can supply bulk of our requirements we will definitely revise import figures. Additionally, NTPC's own mines are also set to start production soon, the official said.

Source:economictimes.indiatimes.com