An analysis of steam coal import logistics in India and factors effecting the costs in the supply chain with reference to Indian power sector

Abstract

India has an ambitious plan of going for additional power generation capacity of 65000MW out of which 44000MW would through coal based. In the year 2009-2010 the domestic thermal coal production has been 400 million tonnes and 44 million tonnes of thermal coal has been imported. So at present 11% of our thermal coal consumption is being met through imports. Keeping in view the limitations in increasing domestic production like environmental, forestry and productivity issues, India is would be more dependent on imported coal for future needs. The projection of integrated energy policy report indicates that the range of coal requirement under various scenarios would be between 860-1296 million tonnes in the year 2031-32 of which imports are projected in the range of 53% to 57%. This underscores the need for adequate and efficient port handling facilities and ocean transport facilities for connecting the supply chain for the thermal power plants. The eleventh five year plan envisages an additional coal handling capacity to 115 million tonnes by the end of the plan period. In additional it is critical to identity the bottlenecks and cut down costs in ocean trade logistics and supply chain for more low cost fuel for the power requirements. The paper attempts to analyse various kinds of vessels transporting coal from Indonesia and south Africa to India. The major problems related to import logistics have been discussed and analysed. It can be concluded that size of ships and port infrastructure are key factors which could reduce the costs in the supply chain.