Weak hydro output may fuel higher coal reliance: S&P

NEW DELHI: India's weak hydroelectricity production in recent times may further coal usage to meet its rising power demand in the coming months, S&P Global Commodity Insights said on Tuesday. It is also likely to keep the coal import window open for the country.

This is despite an increase in coal production, which touched the 1-billion-tonne mark in FY24, which was in line with the government's target of reducing the country's dependence on coal imports, it said. Depleting hydroelectricity generation in the backdrop of irregular rainfall last year has led to a lower water level available in the country's primary reservoirs which could further reduce generation during the summer, it said.

India has imported around 85 million tonnes of thermal coal so far in 2024, S&P Global Commodities at Sea data showed.

"The first half of 2024 could potentially show stronger coal imports than the second half amid a likely lower hydropower generation because of the impact of El Nino," Pat See Khoo, Senior Analyst (Global Power and Renewables), of the company said.