Coal supply to power plants up in Q3 FY22; stocks still below normal levels

The coal dispatches to thermal power plants (TPPs) rose by 28.44 per cent to 183.34 million tonnes (MT) during October-December this fiscal compared to the same period in FY20 as the government directed Coal India (CIL) and its subsidiaries to prioritise stocks to coal-starved plants to ensure uninterrupted electricity supply.

Compared to the December quarter in FY21, coal dispatches were up 25.34% from 146.27 MT. During the October-December quarter in FY20, coal mining firms supplied 142.74 MT of fuel to TPPs. However, even as the supply of dry fuel increased, the stocks at power plants are still below normal levels.

The consumption of domestic coal by TPPs during the April-October period in FY22 grew 25.47 per cent to 365.8 MT against 291.56 MT during the same period in FY21.

Rise in demand

CareEdge, in a report, said, “The power demand in the country has increased since August 2021 as the economic activity in the country ramped up with increased vaccination and complete opening-up of businesses (post the second wave of Covid-19 in April 2021). This also led to supplies to sectors like cement, sponge iron and other sectors, including fertilisers, textile, chemicals, etc, being significantly hit”.

Coal availability

On coal stocks at power plants as of January 1, 2022, the rating agency said “While the pithead power plants have 68 per cent of their normative stock available, the non-pithead plants (non-pit head plants are plants where coal mines are over 1,500 km away) have only 33 per cent of their normative stock available. This is lower than normal stock levels indicating shortage in stock inventory at most power plants”.

As on January 13, the stocks at 18 pithead plants increased to 76 per cent of their normative stocks available, whereas the 162 non-pithead plants still have only 33 per cent of their normative stock available.

Coal imports

The use of imported coal at TPPs fell 32.27 per cent to 18.14 MT from 26.79 MT during the same review period due to high prices in the international markets. The seaborne thermal coal prices in Asia peaked at a new record high of $224.5 per MT in October 2021 following which they softened to $157.5 per MT, but again rose to $169.7 per MT last month.

The Coal Ministry said last month that there has been a fall in imported coal prices since the end of October 2021. However, import prices are still at high levels to discourage coal import. Analysts said the uptick in thermal coal prices will likely persist until Indonesia clarifies on the ban imposed on exports of the commodity from January this year.

Amidst the coal shortage at thermal power plants, the Indian Railways also ramped up the rakes carrying the dry fuel across the country. During December 2021, as against the daily average loading of 296 rakes, the actual average loading of 264.6 rakes took place, which is 96 per cent of the target. In December 2020, the actual average loading stood at 215.4 rakes.

The average loading achieved in December 2021 is the highest in this financial year (April-December).

Thermal power output up

Higher supplies of coal aided in more power generation. Coal-based electricity production grew 4.38 per cent Year-on-Year (Y-o-Y) to 85,579 million units (MU) in December 2021. Compared to December 2020, production was up 11.84 per cent.

During Q3 FY22, India coal-fired power plants produced 2,41,384 MU, a Y-o-Y growth of almost 3 per cent from 2,34,477 MU in Q3 FY21. Compared to Q3 FY20, power production grew 12.63 per cent.

During December 2021, power utility dispatch grew 20.06 per cent to 63.32 MT of coal compared to 52.74 MT in December 2019. Overall, India’s coal despatch increased by 14.62 per cent to 75.05 MT in December 2021 as compared to 65.48 MT in December 2019.

Out of the total production last month, CIL achieved a growth of 12.70 per cent by despatching 60.67 MT of coal, Singareni Collieries (SCCL) attained a gain of 2.01 per cent by despatching 5.70 MT of the dry fuel, and captive blocks registered a growth of 43.23 per cent by despatching 8.68 MT of the commodity during the same period.

Power Generated by Coal-Based Plants (Million Units - MU)

Coal Dispatch to Power Sector (Million Tonnes - MT)

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