Economy

Coal supply situation likely to improve: Power Ministry

Our Bureau New Delhi | Updated on October 10, 2021

The Ministry of Power has issued guidelines recently for operationalising optimum utilization of generating stations

Power Ministry on Saturday said that coal supply and consequently the power situation in the country is likely to improve with both Coal Ministry and Coal India assuring their best efforts to increase coal dispatch to power sector to 1.6 MT per day in next three days and thereafter try to touch 1.7 MT per day.

This is likely to help in gradual build up of coal stocks at the power plant in near future, an official release issued by Power Ministry said.

The Power Ministry constituted Core Management Team — which is closely monitoring and managing vital stocks on daily basis —met on Saturday to review the situation.It was noted that on Oct 7, 2021 the total dispatch of coal by Coal India limited (CIL) touched 1.501 MT thereby reducing the gap between consumption and actual supply.

Meanwhile, an official release said that there are four reasons for the depletion of coal stocks at the power plant end—-unprecedented increase in demand of electricity due to revival of economy; heavy rains in coal mine areas during September, 2021 thereby adversely affecting the coal production as well as despatch of coal from mines; increase in prices of imported coal to unprecedent high level leading to substantial reduction in power generation from imported coal based power plants leading to more dependence on domestic coal; non-building of adequate coal stocks before the onset of Monsoon.

There are also legacy issues of heavy dues of coal companies from certain states viz., Maharashtra, Rajasthan, Tamil Nadu, UP, Rajasthan and Madhya Pradesh, the release added.

A surge in revival of economy after second wave of Covid, led to unprecedented increase in demand and consumption of electricity. The daily consumption of electricity has crossed beyond 4 Billion units per day and 65 per cent to 70 per cent demand is being met by coal fired power generation only, thereby increasing dependence on coal.

Power consumption for the period August-September has progressively increased from 106.6 BU per month in 2019 (normal non covid year) to 124.2 BU per month in 2021. During this period the share of coal-based generation has also increased from 61.91 per cent in 2019 to 66.35 per cent in 2021. As a consequence, total coal consumption in the month of August-Sept, 2021 has increased by 18 per cent in comparison to corresponding period in 2019.

Imported coal price of Indonesian coal jumped from $60/ton in March-2021 to $160/ton (in Sept /Oct, 2021) of 5000 GAR (Gross as received) coal. The import of coal has decreased in comparison to 2019-20 due to import substitution and rising prices of imported coal. The reduction of imported coal is compensated by the domestic coal for power generation, hence increasing the demand for domestic coal further. As compared to 2019, there has been 43.6 per cent reduction in power generation from imported coal which led to extra demand of 17.4 MT of domestic coal during Apr-Sept,2021.

Ministry of Power has issued guidelines on 8th Oct,2021 for operationalizing optimum utilization of generating stations as per the requirements in the Electricity Grid. These guidelines will enable imported coal based plants (having sufficient coal) to operate and ease out the burden on domestic coal, the release added.

Published on October 10, 2021

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