Generation costs of plants running on imported coal are likely to fall as Coal India (CIL) has started supplying them more local fuel which is much cheaper. In November power plants imported almost 6.6 million tonnes of fuel, highest this fiscal. Imports fell 9.8 per cent next month and another 6 per cent in January as local supply rose. To help achieve the Centre's aim to stop coal imports by 2023, Coal India is focused on raising supply for import substitution and is in regular talks with power producers.
Imports are expected to fall further in the weeks ahead a local supply increases. Coal India has decided to supply around additional 70-75 tonnes a year to these companies. A large number of inland plants switch to imported fuel when domestic supply dwindles. Domestic coal, which is 25 to 30 per cent cheaper, reduces generation cost, which is passed on to consumers.
"Coal production is on the rise over the last several weeks and stocks at pitheads are at comfortable levels allowing us to supply increased quantities to generators relying on imported coal," said a senior Coal India executive.