The summer is blazing, and collers and air-conditioners are roaring away, consuming power in vast quantities. Yet, there is no talk of any major power disruption due to shortage of coal. Clearly, Coal India Ltd has manges the situation well, unlike in earlier times.

In May 2018, when AK Jha took over as full-time Chairman of Coal India, the average fuel stock at 114 power stations listed by the Central Electricity Authority was of 10 days. Twenty-nine stations had less than seven days’ stock, and 19 with less than four days’.

Since mid-2017, the fuel situation has been grave. The number of power stations with critical fuel stock has no doubt come down, but the average stock at plants had barely improved till this March.

Better stock position

But as on May 9 this year, when many parts of India are in the grip of a heatwave and demand for electricity is touching new records, the coal stock at power stations is a comfortable 18 days on an average. Only three non-pithead power stations had less than seven days’ stock, and only two had less than four days’ stock.

Between April and May, the total fuel stock at power stations was up from 30.5 million tonnes (mt) to 31.3 mt.

“A concerted effort from both production and marketing to smooth out supplies did the trick,” Jha told BusinessLine .

Demand and supply

That the coal supply mechanism has improved remarkably in the face of spiralling demand is evident. In 2014-15, the state-owned miner produced 494 mt of coal. Offtake (actual sales) was 489 mt. Approximately, 68 mt of fuel — equivalent to approximately seven weeks production — was lying at the pithead.

The situation was distinctly different at the end of the last fiscal. CIL produced 607 mt fuel but sold 608 mt and the pithead stock was 54 mt or four weeks production. “Our production and offtake were increasing but, pithead stock remained the same,” Jha said. High pithead stock indicates sub-optimal use of resources.

But this doesn’t mean problems are over. “There are some plants with over 40 days coal stock and some having less than average fuel stock. This is mainly due to logistical problems in supplying fuel. Such problems are difficult to solve. Theoretically, there is little reason for Tamil Nadu to run coal-based plants more than 1,000 km away from the nearest coalfield in Odisha, when it is easier to buy power from Odisha or Chhattisgarh.

Many State gencos are inefficient too. Yet they remain in operation for a variety of reasons ranging from financial management to local sentiments.

Bottlenecks

There are many irritants on the coal production front too. Over-burden removal, which is a pre-requisite to producing fuel from opencast mines, suffered last year in a few subsidiaries due to aggressive bidding by contractors followed by reluctance in fulfilling contracts won at abnormally low prices.

Jha doesn’t promise any quick fix for such problems. But he promises that CIL will take another quantum jump in production and supplies this year.

comment COMMENT NOW