India's largest power generation company NTPC today said it is not in favour of ramping up its coal imports as this would escalate the cost of electricity.
"...What happens is that mixing of imported coal increases the price of power. Unless there is a correction down the line in the network, it does not make much sense to get more and more imported coal," the company's Chairman and Managing Director Arup Roy Choudhury told reporters on the sidelines of a SCOPE Award function here.
"We need to acquire assets linked to [thermal] coal first of all," Choudhury said.
Meanwhile, the company is also importing the fuel to bridge the shortfall in domestic supply.
"We are already getting 16 million tonne, which is ok... Our eyes and ears are always open for a good buy," Choudhury said.
NTPC imports about 16 million tonnes of coal every year to meet its demand.
In the current fiscal (2011-12), NTPC's coal requirement is about 164 million tonne. Out of the total, about 114 million tonne is expected to come from Coal India.
However, lower production by CIL is impacting power projects in the country. Coal India has revised its production target for the current fiscal to 440 million tonne from 452 million tonne.
Prime Minister Manmohan Singh today said public sector companies, especially in the mining sector, should scout for assets abroad to ensure raw material security.
NTPC asked the Power Ministry last year to allow it to exit ICVL (International Coal Ventures Ltd), a special purpose vehicle (SPV) formed by the Ministry of Steel to acquire coal mines overseas.
International Coal Ventures Ltd (ICVL) is a joint venture between SAIL, CIL, RINL, NMDC and NTPC.
In a presentation to the Power Ministry, NTPC said its coal requirements are different from SAIL, RINL, etc, and therefore, it should be allowed to exit the SPV.
NTPC also said Coal India's new pricing mechanism based on Gross Calorific Value (GCV) could lead to generation costs jumping by about 40%.
"If you want to have GCV-based prices, which is the international norm, then Coal India has to build the infrastructure accordingly," Choudhury said.
NTPC aims to have an installed capacity of 1,28,000 MW by 2032. It currently has 15 coal-based, seven gas-based and six joint venture power stations.
