Companies

Coal stock position comfortable till March: CIL Chairman

Our Bureau | | Updated on: Dec 09, 2021
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‘But there may be some problem in July-August if production is not ramped up’

The shortage of coal at thermal plants, which had triggered fear of massive power outages recently, could once again pose a problem if Coal India Ltd does not ramp up its production.

According to Pramod Agrawal, Chairman and Managing Director, CIL, there is not likely to be any challenge (of short supply) till March next year. However, there may be some problem in July-August 2022 if production is not increased.

“There is no challenge till March but I am foreseeing there may be some problem in July-August next year if we do not increase the production significantly. We have increased our production but it is in the range of about 5 per cent which is 21 million tonnes (mt) whereas despatches have increased by up to 54 mt,” Agrawal said at the Minerals, Mining and Metals e-conclave organised by The Bengal Chamber of Commerce & Industry here on Thursday.

Spike in electricity demand

It is to be noted that in early October this year, coal stock at a number of thermal power plants were at low levels with as many as 107 stations having three days’ stock left as on October 3. The low coal stock was mainly attributed to the sudden spike in electricity demand on the back of a revival in economy. The heavy rains during the peak producing months of August-September also impacted production and despatch of coal. This apart, non-payment of coal dues from states also resulted in inadequate supplies.

Coal stocks at power plants, which had dropped to as low as 7.28 mt as on October 9, have improved to 18.8 mt as on December 7. This is expected to further increase to 40-45 mt by February-March next year.

“There are many factors which compounded the problem – Covid, extended rainfall, lower stock at power houses and increasing prices of international coal. If all these factors again affect then there could be problem but that probability to me looks slightly low. The way we are increasing our production and despatches I feel at power houses the stock will be higher than 40 mt so there will be a cushion. In February-March, we are able to ramp up our production very quickly so we should be able to achieve a stock level of 30-40 mt. I feel that there will be 70-75 mt stock at our end and 40-45 mt at power house,” he said.

CIL’s supplies to power sector

Meanwhile, coal supplied from Coal India’s sources propelled nearly 23 per cent growth in coal fired power generation of the country during April-November 2021 compared to same period last year.

CIL’s despatches to coal based power plants rose steeply to 340 mt during the said period an increase of 62.6 mt, against 277.4 mt for comparable period last year.

As a thumb rule specific coal consumption of 0.67 kg, that is the quantity of coal required to generate one unit of power, CIL’s coal helped generate 507.46 billion units (BU) of power during the referred period spurring 23 per cent growth compared to 414.08 BU same period last year. This is higher than the growth of overall domestic coal-based generation including despatches from sources other than CIL.

Even when measured against a pre-pandemic April-November’19, the growth in power generation from CIL’s coal is 16 per cent when despatch to power plants was 292.88 mt. This translates to a generation of 437.13 BU.

“Dispelling the notion that the recent mismatch between unprecedented coal demand and supply may have affected the power output, domestic coal-based power generation at 641.87 BU in fact grew by nearly 20 per cent (19.8 per cent) during April-November’21 on a year-on-year comparison. Of this generation, CIL’s coal accounted for 79 per cent,” a senior company official said in a press statement.

Power generation

Coal-based power generation by 14 thermal plants in the country, which source their coal from overseas, fell by nearly 43 per cent to 30.04 BU during this period from 52.40 BU of last year. The scaling down in generation was due to soaring international coal prices.

Domestic coal-based power plants had stepped in to meet the gap where CIL supplied around 20 mt of additional coal.

Published on December 09, 2021

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