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Renewable Energy Growth Unlikely To Keep Up With India Coal Imports, Says Fitch

India is expected to maintain the current level of coal imports as the country’s energy demand is likely to increase, says Fitch.

India coal imports increased to 233.56 million tonnes in 2018-19 as compared with 214.61 million tonnes imported in 2017-18. (Photographer: Prashanth Vishwanathan/Bloomberg)
India coal imports increased to 233.56 million tonnes in 2018-19 as compared with 214.61 million tonnes imported in 2017-18. (Photographer: Prashanth Vishwanathan/Bloomberg)

India is expected to maintain the current level of thermal coal imports as the country’s energy demand is likely to increase, ratings agency Fitch Ratings Inc. said in a report. Growth in renewable energy capacity may not be able to keep pace, it said.

"Fitch expects India to maintain its level of thermal coal imports," the ratings agency said. Domestic output of dry fuel and logistics bottlenecks in coal transportation will also affect supply of coal to the market, it said.

“Indian coal imports increased by about 2 percent year-on-year in the nine months to March 2019,” it added. India’s thermal power plant utilisation increased in the second half of 2018 “driven by higher electricity demand and lower capacity addition,” it said.

State-owned power utilities led the growth in thermal electricity generation, Fitch said adding that the utilisation of the central government-owned and private sector plants increased slightly.

Fitch sees cost-competitive renewable energy to account for a larger portion of India's electricity generation in the medium term, and to put pressure on thermal plant utilisation.

India imported 164.21 million tonne of non-coking coal in 2018-19 as against 144.99 million tonne in 2017-18, according to mjunction services, a business-to-business e-commerce company that also publishes research reports on coal and steel verticals. Non-coking coal is mainly used as thermal coal or power general.

India coal imports increased to 233.56 million tonnes in 2018-19 as compared with 214.61 million tonnes imported in 2017-18, according to mjunction Services.