Gencos procure 5.8% of total order value from Coal India's import tenders

CoalMin confident that domestic supply will meet festive season's power demand

Power-generating companies (gencos) have picked up 5.8 per cent of the order value for the coal import tender placed by Coal India Ltd (CIL) over the past two months.

CIL executives said of the tender of 12 million tonnes (MT), it had a supply request for 700,000 tonnes by a handful of gencos for blending with domestic coal.

“We received firm orders of 1.4 MT from gencos, but requests for 700,000 tonnes were withdrawn. For the balance, 350,000 tonnes has been dispatched by the end of August and another 350,000 tonnes is in the process,” B Veera Reddy, director (technical), CIL, told Business Standard.

When CIL had floated the first tender in June, it identified 26 beneficiaries on the basis of the interest it received from states and privately-owned gencos.

It supplied 350,000 tonnes till the end of August to Tamil Nadu Generation and Distribution Company (Tangedco), Kolkata-based CESC, DB Power in Chhattisgarh, and a coal washery company called ACB.

Reddy said the initial 1.4 MT short-term tender by CIL was cancelled on account of high rates discovered.

“CIL then placed medium-term orders for delivery up to next year, totalling 12 MT, as the Centre envisaged more demand to be met from imported coal. Of this 6 MT each was for delivery to the east coast and west coast. CIL is supplying 700,000 tonnes from these contracts,” he said.

The Centre had envisaged 38 MT of imported coal demand due to a shortfall in domestic supply in May this year.

For the medium-term tender, an Indonesian firm, Bara Daya Energi, emerged as the lowest bidder. Adani Enterprises was the lowest bidder for the tender cancelled by CIL.

Rise in domestic coal supply, coupled with reduction in power demand with summer being over, led to demand for imported coal going down.
 

Officials in the Ministry of Coal said the domestic coal stocks with power plants stood at 26 MT, which is three times the stock at the same time last year.

Also, a reversal of the mandatory order to import coal also paused tenders for it.

In May this year, the Ministry of Power asked CIL to import coal for state and private gencos. This came two weeks after state and privately-owned gencos were told to mandatorily import coal for 10 per cent blending, but were later asked to keep their tenders “in abeyance”. Several states expressed reluctance to import coal and asked CIL to arrange the dry fuel from global markets. The directive was annulled in August, when the power ministry said the import of coal was not mandatory and gencos, including the central government-owned units, could import if needed.

At national level, against the import tenders of 20 MT, close to 11 MT was consumed till September 15, according to the coal ministry data, accessed by Business Standard.

This includes the imports of NTPC and states such as Rajasthan, Punjab, Gujarat, Maharashtra and Tamil Nadu.

Currently, imported stocks at generating units using such coal stand at 2.1 MT, and 4.3 MT with plants using domestic coal. According to the government data, 2.5 MT of imported coal for blending is lying at the ports, yet to be dispatched.

While the demand for coal has eased, the normative stock level at the end of power units stands at nine days, the same as this month last year.

Coal ministry officials said CIL was currently supplying 1.8 million tonnes every day to power units.

“CIL’s production has touched 699 MT and it will soon surpass its annual target of 700 MT this year. Domestic coal supply will meet the demand in the coming season as well,” said the official.

Alok Kumar, secretary, ministry of power, recently said there would be no power crisis this festival season.

“The power crisis due to coal shortage is not going to happen this time (during the festival season). We have already imported 20 MT of coal so far,” Kumar said earlier this month.