Domestic Fuel Surge: India Pivots Imported Coal Plants to Burn Local Supplies Amid Falling Imports

Domestic Fuel Surge: India Pivots Imported Coal Plants to Burn Local Supplies Amid Falling Imports​

India is aggressively increasing the use of domestic fuel at imported coal power plants, aiming to curb costly overseas purchases and enhance self-reliance in energy generation. Government and industry officials revealed that a significant push toward local resources is underway across specialized thermal coal units nationwide.

Power Sector Operations Shift Towards Domestic Coal​

Currently, operators are running 5.7 gigawatts (GW) capacity of imported coal-based plants using domestic coal this year alone. This represents part of the total 18.7 GW capacity designed to run on imported fuel. Furthermore, trials are actively progressing to expand this shift across an additional 4.3 GW of these facilities.

The transition required significant modification and operational adjustments at these specialized plants. These units were originally built to process high-grade imported coal, but gradual modifications are enabling them to handle greater volumes of local coal, which typically has a higher ash content. Companies are now employing a mix of both imported and domestic supplies to optimize operations effectively.

Some facilities are already reporting high levels of utilization, with sources indicating that up to 70% of the fuel supply at certain plants is now local coal. A government official also noted that the Coal Ministry has provided doorstep supply mechanisms to these imported-coal plants, ensuring both quality and quantity meet operational needs without complication.

Decline in Imported Thermal Coal Trends​

The shift domestically coincides with a notable downturn in international imports for the nation. Imports of certain coal types saw steep declines between January and April compared to the previous year. Specifically, imports from Indonesia and South Africa fell by approximately 21% and 68%, respectively, according to data provided by Indian coal trader iEnergy Natural Resources.

Thermal coal imports for India as a whole reached a four-year low of 65 million metric tons in the period spanning January to May. This reduction is attributed both to higher domestic output and the rising rate of renewable energy generation within the country, commodities consultancy BigMint stated last week. Imported coal plants previously relied on supplies from countries such as Indonesia, South Africa, and Russia.

Government Efforts Boost Domestic Sourcing​

The government has maintained a sustained effort over several years to reduce reliance on imported coal for power generation in India. This initiative is now seeing positive returns through industrial operational changes. Import-based coal plants have already secured contracts to book 16 million metric tons of domestic coal for their operations.

These strategic adjustments are supporting the broader goal of energy security and resource optimization. Data from Grid-India indicated that coal-fired generation saw a rise of 10% in May compared to the previous year, marking the highest growth seen since May 2024 as utilities ramped up production to meet electricity demand.

The Power Ministry and the Coal Ministry did not respond to inquiries regarding these developments.