Indonesian coal exporters stand to gain from India’s power crunch over the next two quarters, with Adani Power the likely loser.
India’s Power Ministry has ordered 112 captive coal plants to run at full capacity and sell surplus power from October to December as demand outstrips supply. The shortage is severe enough that Delhi is considering mandatory coal imports, which would disproportionately benefit Indonesian exporters that already supply roughly 80% of India’s imported coal. Adaro Energy (Indonesia’s largest coal producer) will secure the windfalls from surging Indian orders. As captive plants dump additional power to the market, domestic power companies will face pressure from dropping prices. Adani Power is left most exposed, with its plants already running at just 62.8% of capacity last quarter, and limited long-term contracts leave its margins vulnerable to price declines. Delhi’s attempt to ease its power shortage will deepen reliance on Indonesian coal while hurting Indian generators exposed to falling wholesale prices.
India’s Power Ministry has ordered 112 captive coal plants to run at full capacity and sell surplus power from October to December as demand outstrips supply. The shortage is severe enough that Delhi is considering mandatory coal imports, which would disproportionately benefit Indonesian exporters that already supply roughly 80% of India’s imported coal. Adaro Energy (Indonesia’s largest coal producer) will secure the windfalls from surging Indian orders. As captive plants dump additional power to the market, domestic power companies will face pressure from dropping prices. Adani Power is left most exposed, with its plants already running at just 62.8% of capacity last quarter, and limited long-term contracts leave its margins vulnerable to price declines. Delhi’s attempt to ease its power shortage will deepen reliance on Indonesian coal while hurting Indian generators exposed to falling wholesale prices.