Plans to supply 1.5 million tonnes of coal to power utilities .

PTC India, the country's biggest electricity trading company, is planning to import coal and buy stakes in overseas coal mines to diversify its business amid increased competition.

The company could source as much as 15 million tonnes of the fuel "in the long run", he said. The energy trader faces competition from new power exchanges and is using part of the Rs 1,200 crore ($275 million) it raised in a January share sale to invest in power projects and energy assets.

PTC will pay supply its coal in exchange for assured supply of electricity for its customers, Thakur said. "Coal is going to be king in the next few years and those who own the resource will grow,'' Prasad Dahapute, a Mumbai-based analyst with Antique Stock Broking, said today.

PTC "will make more money through generation than it can through trading".

The demand for coal, which fires more than half of the country's generation capacity of 1,41,000 mw, is rising. PTC has signed an agreement with a Singapore-based company to buy a stake in mines in Indonesia, the world's biggest exporter of power-station coal, Thakur said, without giving details. "The idea behind developing the business model was to expedite generation and for this, you can't depend on Indian coal alone,'' Thakur said.

India may import about 20 mts of coal in the year through March, according to the Central Electricity Authority, a statutory body that advises the government on power policy and sets technology standards for the industry. Imports may double by 2012, Anil Razdan, the most senior bureaucrat in the power ministry said.

State and private utilities in India plan to almost double the country's generation capacity to 2,50,000 mw by 2017. New power exchanges are expected to help reduce shortages by conducting spot trades in electricity, which is usually sold through contracts, allowing captive plants run by companies to sell surplus power. PTC owns 26 per cent of Indian Energy Exchange, the country's first, which started on June 27.

Financial Technologies (India) is the exchange's founder and majority owner of the world's third biggest gold bourse. The National Commodity and Derivatives Exchange said in June it won approval to set up a competing platform.

NTPC, the country's biggest generator, and Power Finance Corp, which both partly own PTC, plan to set up the country's third electricity exchange.

Power generators haven't kept pace with rising demand from homes, factories, shopping malls and cinemas. India's peak electricity shortage may widen to 18.1 per cent in the year to March 31, when it plans to add 10,178 mw of capacity, according to the Central Electricity Authority. The government targets adding 78,700 mw by March 2012.

Bulk of the capacity addition will come from nine coal-fired plants, each capable of generating 4,000 mw. These so-called ultra mega projects are planned near coal mines or along the coast to enable them to use imported fuel.

Tata Power, the country's biggest electricity generator outside state control, is setting up one of the projects at Mundra in western India and has invested $1.2 billion in two Indonesian mines to secure coal supplies.

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