Domestic coal now powers growing share of India’s import-based plants: Report

India is increasing the use of domestic fuel to more than 50 per cent at power plants designed to run on imported coal, as the world’s second-largest thermal coal importer seeks to curb costly overseas purchases, government and industry officials told Reuters.

The South Asian nation is already using domestic coal to operate 5.7 gigawatts of capacity so far this year out of the total 18.7 GW capacity at imported coal-based power plants, they said.

Trials are underway to expand the switch to another 4.3 GW of capacity.

Import-based coal plants have traditionally relied on supplies from Indonesia, South Africa and Russia, among other countries. Imports from Indonesia and South Africa fell about 21 per cent and 68 per cent, respectively, between January and April compared with the same period a year earlier, according to data from Indian coal trader iEnergy Natural Resources.

Higher power generation from renewable energy sources is freeing up domestic fuel supplies, allowing more local coal to be diverted to coastal power plants that were originally built to run on imports.

India has for years sought to reduce coal imports for power generation, but progress was limited because imported coal-based plants were designed for higher-grade fuel and faced challenges processing lower-quality domestic coal.

Operators have gradually modified units to handle larger volumes of local coal, which has a higher ash content, one government official said.

The companies are using a mix of imported and domestic coal to optimise operations, with some facilities now using as much as 70 per cent local fuel, the sources said.

“The coal ministry has offered doorstep supply to imported-coal plants, which could take care of the quality and quantity needed without any issues,” another official said.

Imported coal-based plants have already booked 16 million metric tonnes of domestic coal for their requirements, a third official said.

The officials could not be named because they are not authorised to speak to the media.

India’s coal-fired power generation rose 10 per cent in May from a year earlier, marking the highest growth since May 2024, as utilities increased output to meet electricity demand, Grid-India data showed.

India’s thermal coal imports fell to a four-year low of 65 million metric tonnes between January and May due to higher local production and rising renewable energy generation, commodities consultancy BigMint said last week.

(With inputs from Reuters)