NTPC Ltd has launched a coal procurement model at its coal power plants, a move that could break Coal India Ltd’s monopoly and boost demand for coal from mines sold in auctions.

Under a tender in January, the generator received 3 million tons of coal via doorstep delivery and plans to scale volumes as more mines from auctions start output.

Historically, power companies collected coal at mine sites, arranged rail transport and managed unloading at plant yards. The model places logistics on coal suppliers. Officials at a state generator say the method offers a supply chain that can withstand disruptions and may be adopted in future fuel supply agreements.

NTPC’s portfolio includes 77 gigawatts of capacity, supplying one quarter of national electricity. Coal India Ltd accounts for 86 percent of domestic production, while auctioned mines contribute 14 percent of output.

Imported coal covers about 10 percent of NTPC’s consumption. Delivery rates exceed those from Coal India Ltd, but doorstep procurement costs less than imports. Added costs are passed to end users and absorbed within margins.

Coal ministry data show that since 2020, 125 mines with combined capacity of 273.06 million tons have been sold in auctions. Sixty-three mines have begun production; the remainder are under development. Analysts project annual revenue of 38,767 crore rupees from these mines.