The government has asked state-owned Coal India Ltd (CIL) to augment the coal supply to power producers to 1.55-1.6 million tonnes (MT) per day around the Durga Puja period, and to further scale it to 1.7 MT per day after 20 October, according to a source.
The development assumes significance in the wake of the country’s power plants grappling with coal shortages in the country at a time when the festival season has already begun.
“Yesterday (11 October), there was a meeting in Delhi and Coal India was asked to do (supply of) 1.55-1.6 million tonnes (of coal to power sector) per day around Puja time; and after October 20, the public sector undertaking is supposed to do 1.7 MT per day,” the source privy to the development said.
The coal dispatches by CIL to the power sector on 11 October stood at 1.615 MT.
In a country where 69% of the total electricity generation is coal-based, CIL empowers the nation’s power sector. Around 80% of CIL’s total supplies are catered to the power sector, according to a recent report of the firm.
The source said the power plants were getting the amount of coal that was required for generation but the stocks were not building up as they did not replenish them. The coal stocks at power plants will start building up from 1 November onwards, the source said.
“They (power plants) didn’t replenish their stocks. Many of them took that risk. So, they are paying for it now,” the source said.
Coal India Ltd (CIL), the officer said, had 100 million tonnes of the fuel stock at the end of the financial year 2020-21.
“Why did that stock accrue is because people (power plants) did not take their designated supplies. They thought that why to waste money right now when there is no requirement,” he said.
CIL had on 11 October said it has scaled up the supply of coal to power utilities across the country to 1.51 million tonnes (MT) per day during the past four days of the current month, and stressed that it is building up adequate evacuation logistics to transport the dry fuel.
The average supply to coal-fired power plants during October so far has been 1.43 MT per day, which has now been augmented to 1.51 MT in the past four days.
CIL had said that it was marshalling all its efforts to bridge the demand-supply gap to the extent possible. With 40 million tonnes stock at its pitheads and increasing, the availability of coal will not be a problem.
CIL Director (Marketing) SN Tiwary had said, “The aim is to ramp up supplies to the power sector even higher, which we hope to achieve after Puja. Once the despatch rate is maintained, the stock build-up will help tide over the tight situation.” Despite heavy rainfall, CIL produced about 126 MT of coal during the second quarter of the current financial year, setting a record high for the second quarter, posting a 9.6% year-on-year growth.
During the first 10 days of October, CIL’s output has logged 6.5% growth over last October.
The production will increase further when the attendance at coalfields improves after festival holidays.
CIL’s supplies to power generation companies have been at an all-time high till now this fiscal but it is the never-experienced-before hunger for the dry fuel, spurred by an unmatched increase in power generation that upset the demand-supply scales.
Once October and major festivals are over, conditions will improve and the power demand is expected to be down by a notch, easing the pressure, it said.
During the first half of the current fiscal, loading to the power sector at 225.3 rakes per day was up 28% compared with 176.3 rakes of last year same period.
“The company is building up adequate evacuation logistics to transport coal,” it said.
The major pain point for CIL has been 14 imported coal-based power plants scaling down their generation due to skyrocketing coal prices in the international markets.
Domestic coal-based thermal power plants had to step in to fill in the generation shortfall, which in turn placed an un-factored load of around 10 MT on CIL. Had this not happened, the stocks at power plants would have been around 17-18 MT instead of the bleak seven MT now.
During September, the generation from these plants at 2.041 MW fell short by 75% against the target of 8.114 MW. The generation logged negative growth of 72% compared to September 2020, when they generated 7.238 MW. Progressively up to September, the contraction in the generation was 30% over the same period a year ago.
Coal India Ltd accounts for over 80% of the domestic coal output.