India's Thermal Coal Imports Hit Four-Year Low Amidst Rising Domestic Output and Renewables
Quick Look
- India's thermal coal imports dropped to a four-year low in January-May, totaling 65 million tons, a 12% annual decline.
- This is driven by increased domestic coal production and a significant 22% surge in renewable energy generation, as the country aims to reduce import reliance.
AI-generated summary
Why It Matters
India's thermal coal imports have fallen to a four-year low due to increased domestic coal production and a significant rise in renewable energy generation. The country is actively working to reduce its dependence on imported coal for power.
New Delhi: India's thermal coal imports fell to a 4-year low in January-May due to higher local output and rising renewable energy generation, commodities consultancy BigMint said.
Overall, thermal coal imports, at 65 million tons in the year till May, declined by an annual 12%, the consultancy said.
India, the world's second-largest importer of thermal coal, has been seeking to reduce its reliance on imports and aims to cut the use of such coal for power generation by at least 30% this year.
The country's top producer, Coal India, had asked its subsidiaries to ramp up output as scorching temperatures due to the El Nino weather pattern increased electricity use.
Higher prices for imported coal and elevated freight rates due to the crisis in the Middle East also weighed on imports, BigMint said.
RISING RENEWABLE GENERATION
In January-May total power generation increased 5% from a year earlier, while renewable generation grew much faster at 22%, BigMint said.
India's peak power demand, a measure of the maximum electricity requirement, exceeded the country's expectations of 270 gigawatts on May 21, driven by heat waves.
Power demand in the South Asian nation climbed 11.2% to a two-year high in May, data from federal grid regulator Grid-India showed.
Thermal power generation rose 10% from a year earlier in the month, the highest since May 2024, as utilities ramped up output to meet round-the-clock electricity demand, the regulator's data showed.
During the month, India's renewable power generation rose 29.31% from the previous year to 27.58 billion kilowatt-hours, accounting for a record 17.9% of the country's power mix, according to a Reuters analysis of daily government data.
Open Questions
- Will this trend continue long-term?
- What are the implications for global coal prices?
