India’s coal imports expected to continue decline

The ongoing downtrend in coal looks set to continue, with new reports highlighting a decline in Indian imports.

Figures from the International Energy Agency show Indian coal imports fell 34 per cent year-on-year in December 2015, taking the total to 12.4 million tonnes from 18.4 million in the same period 2014.

November saw a 49 per cent drop in imports year-on-year, and the period April-December fell 15 per cent on 2014.

Institute for Energy Economics and Financial Analysis (IEEFA) director Tim Buckley said the flagging figures were a sign that India had reached peak coal consumption in mid-2015, and was set for ongoing decline in the coming years.

“The IEA’s forecast of sustained thermal coal import growth into India looks outdated even as the latest 2015 report was printed,” he said.

The falling figures has been taken as consistent with the pledge made by India’s energy minister Piyush Goyal, who said the nation would cut thermal imports altogether by 2017.

Goyal’s claims were met with scepticism by global coal campaigners such as World Coal Association chief Benjamin Sporton, who maintained India would find it a challenge to meet the demand of 292 gigawatts worth of new coal power plants using only domestic production.

Coal India Limited reported it had increased production by 9.1 per cent year-on-year over the April-December 2015 period, while coal dispatches rose 9.8 per cent thanks to the removal of impediments to the rail system.

The IEEFA has also suggested that new coal plants will be underutilised, with coal plant utilisation levels having fallen from 74 per cent in 2011/12 to only 58.1 per cent in 2014/15.

Plant utilisation in 2015/16 has been forecast to dip down to less than 50 per cent.

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