CIL steps up coal supply to power utilities

Our Bureau Kolkata | Updated on September 29, 2021

Touches 1.4 mt a day, up from July-August levels of 1.2–1.3 mt. Further plans to increase supply to 1.9 mt by the end of this year

Amid shortage of coal at power plants, Coal India Ltd (CIL) has stepped up supplies to power utilities to 1.4 million tonnes (mt) a day from the previous levels of 1.2–1.3 mt in July-August. The State-owned miner further plans to increase it to 1.9 mt by the end of this year.

“CIL has taken this up on a mission mode. Availability of coal and subsequent supplies will be ramped up. Despatches to coal fired plants from October onward are aimed at 1.5 mt per day, going beyond 1.6 mt in due course,” a senior company executive said in a press statement.

This is aimed to bring in normalcy soon and build up coal supplies to adequate levels.

Sudden spike in demand

A sudden spike in power generation in the second week of August triggered the increased appetite for coal. As a result, coal demand outpaced supply, leading to depletion of stocks at power stations.

Also see: CIL launches software for better assessment of coal resources

CIL, which had envisaged the possibility of such a situation, had been writing to the Central Electricity Authority (CEA) and power gencos since October 2020, urging them not to regulate the intake of coal and to build up stock.

“Had the power utilities maintained the CEA prescribed normative stock of 22 days the low coal stock situation could have been averted,” the release said.

Outstanding dues

Despite monsoon challenges and non-payment of outstanding dues, CIL supplied 243 mt of coal to power utilities during April-September 2021 (till September 28), almost 24 per cent higher than the 196 mt supplied to power utilities during the same period last year. Coal supply to the power sector during said period is was also higher by 11 per cent as compared to pre pandemic levels of 218 mt during April-September 2019.

The outstanding dues of CIL from the power sector is estimated to be to the tune of ₹22,000 crore.

Also see: CIL arm inks revenue sharing contract with Prabha Energy

Coal stocks were at a comfortable level of 28.4 mt at the beginning of the fiscal and even by July end, coal stock at power utilities was 24 mt, at par with the previous five year average of the same period. However, stock at power plants fell by over 11 mt in August.

“Recent pickup in coal demand is linked to several reasons. Primarily, imported coal based plants worked at low capacity curtailing power generation due to an increase in the price of imported coal and shipping rates. This has resulted in the demand shift to the domestic coal fired plants. The fact that they regulated their coal intake further exacerbated the situation,” CIL said in the statement.

Published on September 29, 2021

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