NTPC Limited's Coal Procurement Strategy
NTPC Limited, India's largest power generation company, has initiated the procurement of coal from privately owned commercial coal mines in the country for the first time.
Previous Coal Sourcing Method
- Previously, NTPC sourced coal solely from state-run Coal India Limited (CIL) through long-term fuel supply agreements (FSAs).
- NTPC also imported higher-grade coal, primarily from Indonesia, to blend with domestic coal and address supply gaps from CIL, accounting for 8–10% of its overall coal demand.
New Procurement from Private Mines
- NTPC issued tenders to procure 3 million tonnes of coal from private mines over the past six months, targeting non-pithead power plants.
- Coal from commercial mines is slightly costlier than FSA coal from CIL but cheaper than imported coal.
- NTPC aims to eliminate imported coal usage in the near future.
Cost and Delivery Efficiency
Coal from private mines is delivered directly to NTPC plants, contrasting with CIL coal, which requires additional transportation from rail sidings. This direct delivery is both cost-effective and environmentally efficient.
Annual Coal Requirement and Supply Sources
- NTPC’s annual coal requirement is approximately 240–250 million tonnes, with CIL as the primary supplier.
- NTPC's captive mines have begun production, meeting up to 15% of the total requirement last year.
Government Initiatives and Auctions
- Since 2020, the Indian government has been auctioning commercial coal mines to boost domestic production and reduce import dependency.
- 125 coal mines have been auctioned, with a combined production capacity of 273.06 million tonnes per annum.
Power Generation Capacity
- NTPC Ltd has a total installed capacity of 75 GW.
- In 2023-24, NTPC imported 9 million tonnes of coal, received a 3 million tonne supply from private mines, and 34 million tonnes from its own mines.