Economy

Coal India: Demand outstrips supply despite 12% more coal being sent to power plants

Shobha Roy | | | Updated on: Oct 05, 2021

The company also registered nearly 10 per cent growth in production at close to 126 mt as against 115 mt same period last year

Coal demand is continuing to “far outstrip supplies” despite its ramping up supplies by nearly 12 per cent on a year-on-year basis to thermal plants feels Coal India Ltd (CIL).

The state-owned miner is, however, hopeful that the near 10 per cent growth in production and total offtake during the second quarter of this fiscal should help stabilise coal stocks at power plants. However, the critically low stocks at a number of plants threatens to put the country’s power output at risk.

According to the data available on the Central Electricity Authority website, as many as 76 thermal plants had less than five days’ stock left as on September 30, 2021 while 28 plants had stocks for 6-9 days.

The drop in coal stocks at power plants is primarily due to a sudden spike in electricity demand on the back of a revival in the economy, and heavy rains in August-September also impacted production and dispatch of coal. This apart, the surge in imported coal prices led to an increased dependence on domestic coal, said industry sources.

Moreover, as per information available on the CEA website, a number of plants did not build up adequate coal stocks before monsoon. The non-payments of coal dues from States such as Maharashtra, Rajasthan, Tamil Nadu, Uttar Pradesh and Madhya Pradesh also resulted in inadequate supplies.

CIL, which had envisaged such a situation, had been requesting gencos from October 2020 to shore up their stocks by lifting coal, instead of regulating the intake, to avert a low stock situation during monsoon. The situation would not have turned so bad had power utilities maintained the CEA prescribed 22-day normative stock at their end.

 

CIL ramps up supplies

Amid soaring coal demand and depleting stocks at coal fired power plants, CIL has ramped up supplies by nearly 12 per cent on a year-on-year basis. The state-owned miner supplied 117.6 million tonnes (mt) to power utilities during July-September 2021 quarter as compared with 104.7 mt same period last year.

Supplies to power utilities is even higher at around 17 per cent when compared to around 100.3 mt during the Covid-free second quarter of FY-20. CIL’s off-take to power sector during the first half of this fiscal stood at around 246 mt, which is estimated to be the highest ever for this period so far, the company said in a press statement.

CIL’s total off-take increased by around 10 per cent to 147.3 mt during the second quarter of the current fiscal as against 134.3 mt same period last year.

The company also registered nearly 10 per cent growth in production at close to 126 mt as against 115 mt same period last year. The company is hopeful that the production and offtake that it has been registering should help stabilise stocks at power plants.

“The company is responsive to the importance of improving coal stocks at thermal power stations. We are rallying our efforts to restore normalcy as early as possible by pushing additional quantities. The demand is far outstripping the supplies now,” S N Tiwary, Director Marketing of CIL said in the statement.

There was an additional supply burden of around 10-12 mt on CIL to cater to domestic coal based TPPs due to curtailment of

Published on October 04, 2021
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