India has launched an ambitious plan to cut by at least 30% its imports of thermal coal for power plants. The government’s goal is to replace around 15 million tonnes of imported coal with domestic supply during 2026, strengthening its energy sovereignty.
Reducing coal imports and using domestic resources
The official strategy focuses on increasing the share of domestic coal in power generation plants, especially those designed to operate with foreign coal. These account for nearly 17 gigawatts of installed capacity. To achieve this, authorities have asked generators to test higher blends with coal of domestic origin.
State-owned Coal India, which accounts for nearly 80% of the country’s total production, ended the fiscal year with inventory levels close to 90 million tonnes. Faced with this surplus, the company began exporting to neighboring markets such as Bangladesh, Bhutan, and Sri Lanka as a way to ease pressure on its warehouses.
Technical constraints and the government’s response
Despite the efforts, several plants warn that using more domestic coal means recalibrating their boilers, since local coal tends to have a lower calorific value. This adaptation involves high costs and could require government subsidies.
In response, the government says the domestic supply intended for the tests will meet high quality standards. The Ministry of Coal has insisted that between 20% and 30% of imported coal can be replaced in most thermal plants without compromising operational efficiency.
Outlook and energy transition
India still relies on coal for three quarters of its electricity production, even as renewable capacity grows rapidly. Even with plans to increase its coal-fired generation capacity to 307 GW over the next decade, the country is seeking to balance this expansion with a gradual reduction in imports.
Analysts note that demand for imported coal with low and medium calorific value will gradually shift toward industries such as cement and sponge iron, reserving external purchases for uses that require highly specific grades.
India’s strategic move marks a key stage on its path toward greater energy self-sufficiency, keeping coal in a leading role while it advances its transition to clean energy.
Source: Reuters