The International Energy Agency (IEA) has estimated that there will be fall in the demand for imported coal in the country.

In its Coal 2017, Analysis and Forecasts to 2022, the IEA said: “We have significantly reduced our forecast for thermal coal imports to India compared with last year’s report, in response to government measures to reduce dependence on imports.”

The government’s push will be the trigger for the lowered imports, according to IEA. The report said: “A number of policies to cut imports have been implemented, which we expect to have an impact despite the lower quality of domestic Indian coal.”

But IEA expects an increase in total coal demand in the country. The report said: “Despite rapid growth in renewable energy deployment, coal use will continue to rise in India. With a growing fleet of coal power plants running at less than 60 per cent of capacity and robust power demand growth, coal-fired generation is forecast to increase at nearly 4 per cent annually through 2022.”

“Outside the power sector, growth in thermal coal demand is centred in the industrial sector thanks to robust economic growth, as well as in coking coal, thanks to rising steel consumption, housing, railways and steel-intensive industries such as shipbuilding, defence and vehicle manufacturing,” the report adds.

Meeting the demand

The IEA said that the demand for coal will largely be met through Coal India. The report said: “Future production in the State-owned Singareni, captive blocks and commercial mining (if any) will play a role, but the performance of Coal India, which maintains its ambitious targets for coal production, will be critical to meet the government’s desire to cut imports.”

But for coking coal, the IEA expects imports increasing by over 5 per cent per year through 2022. This will because quality issues are more difficult to overcome while attempting to substitute coking coal with domestic varieties.