By Sanjeev Choudhary
NEW DELHI, April 4 (Reuters) – Indonesia’s plan to impose a
25 percent export tax on coal may turn Indian power producers
towards other coal exporting countries and increase tensions
between companies and the Indian government over electricity
tariffs.
About 9,000 megawatts, nearly 10 percent of India’s total
coal-fired capacity, became unviable last year after Indonesia
changed rules on coal prices. An additional sudden spike in coal
costs would make matters worse and push other plants to raise
prices, which would lead distribution utilities to buy less.
India imports about 12 percent of its coal requirements and
sources 70 percent of that from Indonesia, the world’s largest
thermal coal exporter.
“It’s a setback for power producers. This will discourage
them from taking up projects based on imported coal,” said K
Rajagopal, CEO for thermal at India’s Lanco Infratech Ltd
, which runs a 1,200 MW plant fuelled entirely by
imported coal.
State-run NTPC, Tata Power and Adani
Power will be among the many Indian companies likely
to be affected by Indonesia’s export duty.
Coal fuels more than half of India’s power capacity of
191,000 MW and will be required for 85 percent of the 76,000 MW
additional capacity targeted in the next five years.
“Plants can’t run on such expensive coal imports. This will
make power unaffordable in India,” said Ashok Khurana, director
general of the Association of Power Producers.
“The only option is to ramp up domestic production and
change the fuel mix with emphasis on renewable sources,” said
Khurana.
Continued…
