NTPC invites bids for importing 2 million tonne coal

India's largest thermal power producer, NTPC, has issued an 'invitation for bids' (IFB) for procuring 2 Million Tonne (MT) of imported coal. In two separate notices, the generating company (genco) has invited bids for its own power plants and for DVC, 1 MT each. 

The move comes in wake of ongoing coal shortage in the country with the average coal stock level at power units being 4 days. The Centre now claims the situation is under control with demand cooling off and enhanced domestic coal supply from Coal India Ltd, power units are planning for high demand festive months ahead, said a sector executive. 

However, the cost of coal in the global market has shot up with current rates around Rs 12,000 per tonne. According to industry calculation, this increases power generation cost by Rs 0.50-0.75 per unit. This is passed on to electricity costs paid by the power distribution companies (discoms). 

While the Union Ministry of Power and Coal initially denied reports of coal shortage and an electricity supply crisis, the Centre later asked thermal power generators to import coal for at least 10 per cent blending, citing shortage of domestic coal supply.

The company in its IFB mentioned it has requirement of 1MT imported coal of for its power plants - Talcher-Kaniha, Mouda, Farakka-Kahalgaon, Simhadri, Dadri, Solapur, Kudgi, Unchahar, Tanda, Korba, Sipat, Lara, Darlipalli, Barh, Bongaigaon, Barauni, Gadarwara, Vindhyachal, Rihand, Singrauli, Khargone, Ramagundam. 

Similar IFB has been issued for DVC power plants on behalf of NTPC. The company will hold a reverse auction of successful bidders to finalise the supplier. 

NTPC is issuing IFB to import coal after a hiatus of at least two years. In August this year when a coal shortage gripped the power sector, NTPC had imported close to 2.7 lakh tonne, which it said was "leftover quantity from earlier contracts." 

Earlier this month, The Centre asked thermal power generators to import coal for at least 10 per cent blending, citing shortage of domestic coal supply. This is a sharp reversal of its earlier directive of using domestic coal.

"Thermal power plants based on domestic coal will use imported coal of up to 10 per cent for blending with domestic coal, wherever technically feasible, to meet the increased power demand in the country. Power generation companies (gencos) shall expedite the process of importing coal for blending to meet the requirement,” stated the notification on October 12. 

When the crisis started in August with a coal supply shortfall, the Union power ministry earlier urged gencos to "consider import of coal".

Since August, coal stock levels at thermal units have dwindled. Currently, 29 Gw of power generation capacity has one day of coal stock and 22 Gw has less than three days of coal, according to the National Power Portal.