India is increasing the share of domestic coal to more than 50% at power plants originally designed to run on imported fuel, as the world's second-largest thermal coal importer seeks to reduce costly overseas purchases, government and industry officials said.
The South Asian nation is already using domestic coal to operate 5.7 gigawatts of capacity this year out of a total 18.7 GW at import-based plants, the officials said. Trials are underway to expand the switch to an additional 4.3 GW.
Import-based coal plants have traditionally relied on supplies from Indonesia, South Africa and Russia. Imports from Indonesia and South Africa fell about 21% and 68%, respectively, in January through April compared with a year earlier, according to data from Indian coal trader iEnergy Natural Resources.
Higher power generation from renewable sources is freeing up domestic fuel supplies, enabling more local coal to be diverted to coastal plants built for imported fuel. India has for years sought to cut coal imports for power generation, but progress was constrained because import-designed plants were built for higher-grade fuel and struggled to process lower-quality domestic coal.
Operators have gradually modified units to handle greater volumes of local coal, which has higher ash content, one government official said. Companies are now using a mix of imported and domestic supplies to optimise operations, with some facilities running on as much as 70% local coal, the sources said.
