With close to 36 million tonnes (mt) of stock at its pithead and around 11.5 mt at various loading points awaiting shipment, Coal India Ltd (CIL) is confident that the current coal stock situation is comfortable to meet the present power demand unless there is a sudden spike.

The total stock at CEA monitored thermal plants was 29.6 mt as on July 30, up from around 24 mt same period last year. Higher supplies from CIL helped build stock at power plants to the tune of 1.04 lakh tonnes per day in July this year, which is also the highest for this fiscal, said a press statement issued by CIL.

As many as 78 plants have critical stock (coal stock less than 25 per cent of normative stock) as on July 30 this year, as against 24 plants last year, according to data available on the National Power Portal.

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It is to be noted that coal stock at a number of thermal power plants had dropped to critically low levels in September-October last year due to sudden spike in electricity demand on the back of a revival in economy. The heavy rains during August-September also impacted production and despatch of coal.

According to Rupesh Sankhe, analyst at Elara Capital India, there has been a strong power demand in the last few quarters and CIL will look to ramp up its production and supplies to meet the demand.

“We are not getting adequate renewable energy generation and the price of imported coal is very high making domestic coal highly competitive. CIL will continue to ramp up production and supplies to meet the demand. They have kept some inventory to meet any possible decline in production during monsoon months (August-September) but post-September we expect production to be ramped up further,” Sankhe told BusinessLine.

Ramping up production

The state-owned miner produced 207.1 mt during April-July, which is almost 24 per cent higher as compared to 166.6 mt same period last year.

For July alone, CIL produced 47.3 mt, almost 11 per cent higher as compared to same period last year thereby maintaining the double digit streak for the fourth month on trot this fiscal, despite the monsoon slowing down its production.

Amid the escalated demand from power stations during the current financial year, CIL supplied 199.4 mt to the sector progressive till July’22, posting 19 per cent growth compared to 167.3 mt same period last year.

According to Ritabrata Ghosh, Assistant Vice-President, ICRA, on one hand CIL has been ramping up production and supplies to power sector and on the other hand production from captive mines is up by nearly 79 per cent in Q1 FY23 on a year-on-year basis. This should help avert any possible shortfall in supplies.    

CIL has been able to maintain a strong production run rate so far this fiscal and at this rate it should be able to produce close to 700 mt during the current fiscal.

“Their production track record as of now is much better than what most people had expected. If they are able to maintain this run rate then they should be able to touch a production of around 700 mt by the end of this fiscal and can help avert any possible shortfall,” Ghosh said.

The projected increase in production from captive mines was expected to be close to 25 per cent but they have clocked nearly 79 per cent growth on year-on-year basis.

“Earlier coal was available when needed but now that has become scarce so whoever has mines have started ramping up production. This will help meet the demand from non-power sector,” he said.  

With 6 mt, coal import orders in place and scaleable option up to 12 mt, CIL is closely monitoring the supply situation to power plants to handle surge in demand.