NTPC to procure coal directly at thermal plants, flourishing business opportunities

The biggest power producer in India, NTPC Ltd, has started getting coal straight to thermal power plants. This could end Coal India Ltd's (CIL) monopoly and increase demand for the fuel from commercial miners. Earlier, NTPC used to procure a large share of its coal requirement from Coal India. It also sourced the dry fuel from its own captive mines, and imports.

"The company has adopted a new procurement model for doorstep coal delivery. It is also buying coal, floating a tender 'domestic coal procurement through auction'," as per sources.

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Both state and private businesses could adopt NTPC's new fuel sourcing strategy, which represents a move towards a more market-driven approach. Analysts predict that the new approach will present significant business opportunities for commercial mining firms.

For some reason, the genco (generation company) has been in charge of collecting coal from the mines, loading it onto railway rakes, transporting it and unloading it at the thermal power plant ever since the beginning.

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A senior executive at NTPC, a public sector enterprise (PSU), stated, "We now see a possibility of this changing with the opening of commercial coal mines because there is competition and not just one sole producer, Coal India Ltd."

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