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The Power Ministry on Saturday directed States to make timely interventions for ensuring adequate coal supply at power plants ahead of the peak demand season. The directive comes at a time when the all-India cumulative coal stock at power plants is 38 per cent of the around 67 million tonne (mt) of normative stock requirement.
“The Ministry of Power has been monitoring the coal supply situation in the country and has been taking steps to ensure adequate coal supply and coal stocks based on the domestic coal received from Coal India (CIL), Singareni Collieries Company (SCCL) and captive coal mines,” the ministry said in a statement.
As per decision taken in the Ministry in consultation with State Gencos, independent power plants (IPPs) and central Gencos, the domestic coal supply to all Gencos will be in proportion to the coal received from CIL and SCCL for all the Gencos and it will not be possible to give more coal other than on proportionate basis to make up any shortfall, it added.
For imported coal based (ICB) power plants, which are importing less quantities due to high global prices, the ministry said it has been observed that non-operation of certain ICB plants in states had put more pressure on domestic coal demand leading to low coal stocks for domestic coal based (DCB) plants.
“The procurers and sellers, are legally bound by the PPA in force as signed by both the parties. While procurers are bound to pay bills timely as per PPA, the Gencos (sellers) are bound to maintain adequate fuel stocks and offer availability as per the PPA. Not maintaining adequate fuel stocks or not giving availability on any pretext (high price of imported coal, etc) is inexcusable,” it added.
The Ministry also asked States to ensure timely implementation of PPAs with ICB plants with necessary contractual interventions or in extraordinary circumstances, use statutory provisions of the Electricity Act, 2003 to ensure generation.
Market watchers said the coal supply situation is getting worse and this is just ahead of the summer and monsoon. With all indications that power demand will rise further, and that stocks are not adequate to meet growing demand, the situation could become “serious”.
Stretched coal supplies
The total capacity of thermal power plants (173) – domestic coal, imported coal and plants at present not in operations – is 203.17 gigawatts (GW). Of this, 65 power plants based on domestic coal and nine on imported coal have critical stocks. According to the National Power Portal data for March 24, at pan-India level, the daily stock requirement at power plants is around 2.5 MT and the total stock available is 25.31 mt.
For 150 plants based on domestic coal (182.87 GW capacity with a plant load factor of 68.2 per cent), the daily requirement at 85 per cent PLF is 2.6 mt. The normative stock required is 61.7 MT. The actual stock available at plants is 23.72 mt, which is 38 per cent of normative stocks.
For the 14 ICB plants (16,730 MW capacity with a PLF of 12.7 per cent), the daily requirement at 85 per cent PLF is 2.6 mt. The normative stock required is almost 4 mt. The actual stock available at plants is around 1.6 mt, which is 40 per cent of normative stocks.
Rising power demand
The last peak power demand or the highest supply in a day was 200.57GW on July 7, 2021. On March 15, 2022, the peak power demand met was recorded at 197.01 GW, against peak power demand met in March 2020 and March 2021 at 170.16 GW and 185.89 GW, respectively.
Declining imports
Coal imports have been consistently heading south since FY20. From 248.54 mt in FY20, to 215.25 mt in FY21. During April-January period in FY22, coal imports fell further to 173.32 mt ( 180.56 mt). In-bound shipments by the power sector also fell from 69.22 mt in FY20 to 45.47 mt in FY21. During April 2021-January 2022, in-bound shipments shrunk to 22.73 mt (39.01 mt).
High international prices
Current prices for Australian coal (6,000kcal/kg), South African (6,000kcal/kg) and Indonesian coal (5,900kcal/kg) were at $170, $353 and $443 a tonne, respectively. Newcastle coal futures in Europe crossed $440 per tonne in March 2022. This is expected to result in higher e-auction premiums for CIL, ICICI securities said.
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