Tough times beckon for power plants set up in coastal areas and running on imported fuel, with the price of Indonesian coal shooting up on increased Chinese imports.
Accordingly, these plants will have a higher fuel bill in August as prices of Indonesian steam coal have risen 44% to a seven-month high. International coal prices have risen 6.4% since June as China cut production and increased import.
S&P Global Platts said US export prices of premium coal increased from $68 a tonne in January to $75.5 a tonne in August.
The consequent increase in power cost will make it difficult for coastal plants to compete, say experts.
Given the vulnerability of the international coal market to volatility, the NDA government has laid special focus on increasing domestic production and reduce dependence on imported coal.