The reverse trend, where domestic coal based power plants are using more imported coal than ICB plants, is due to a government policy aimed at ensuring continuous electricity generation to meet the rising demand.

Since last year, the government has been invoking section 11 of the Electricity Act, 2003, under which imported coal based power plants have to mandatorily operate to meet the country’s increasing power demand.

Domestic coal-based thermal power plants have pipped imported coal-based plants in consumption of imported coal due to higher blending for power generation.

Domestic coal-based power plants consumed 35.1 million metric tons (MMT) of imported coal in 2022-23, accounting for 63.1 percent of the total coal imports (55.6 MMT) for the sector, according to data from the Ministry of Power. This is a steep increase from 2018-19, when these plants, which otherwise run on coal produced within India, consumed 34.6 percent (21.4 MMT) of the 61.7 MMT coal imported for the power sector during the year.

In the five years between FY19 and FY23, India has added about 10 GW of domestic coal based power capacity. The higher consumption of imported coal by these power plants is primarily because the imported coal was used to blend with domestic coal to ensure higher power generation at a time when local coal output has remained lackluster.

Meanwhile, imported coal based (ICB) power plants, which only use the grades of coal that are imported, consumed 20.5 MMT or 36.8 percent of the imported coal in 2022-23. In 2018-19, the same was as high as 65.3 percent (40.3 MMT) of the total coal imported for the power sector.

The domestic coal based power units are now consuming a lion's share of the total import at a time when the overall import of coal for the power sector declined 9.8 percent from 61.7 MMT in 2018-19 to 55.6 MMT in 2022-23.