It seems like a chicken-and-egg problem when one talks about India’s power sector. Summer after summer the key stakeholders — coal miners, power producers and players managing the logistics — point fingers at the other for the outages the country faces. And the consumer remains helpless.

The story is the same this summer too. The coal miners, including public sector giant Coal India Ltd (CIL), maintain that there is enough coal available at the mines, but power plants are not lifting it. Power producers complain of depleting stocks at the plants, because supply was an issue. And both say the Railways, which is the key transporter, is not adding enough rakes to ferry the feedstock. The Railways, reportedly, is of the view that supply was not enough to add more rakes.

In fact, on April 25, the Union Minister for Power RK Singh and Railway Minister Ashwini Vaishnav held a meeting to discuss short-term and long-term strategies for dealing with increasing power demand. Singh, once again, urged all the stakeholders at the Centre and States to work hand-in-hand for unhindered power supply, he asked the generation companies (Gencos) to own freight rakes under the Railways Ministry scheme to deal with logistic constraints in coal supply. The decision-makers also discussed increasing the operational efficiency in loading and unloading of coal, increasing the percentage of rakes allotted for the power sector and other issues.

Then again, this is not the first time that these deliberations have taken place. When everyone is aware of the challenges, wherein lies the problem? Why is this situation happening year-after-year?

Yes, there has been an increase in demand, but hasn’t the country’s power sector also expanded its feedstock basket with other resources. According to information available, the power generation source break-up is: coal 75.7 per cent, lignite 1.7 per cent, gas naptha and diesel 2 per cent. The total fossil fuel as a feedstock is 79.3 per cent. Hydro’s contribution is 8.5 per cent, wind 2.8 per cent, solar generation 5.9 per cent, other renewable energy sources account for 1.2 per cent, and nuclear is 2.2 per cent. The total non-fossil contribution accounts for 20.7 per cent.

According to sources, as on April 26, 21.45 million tonnes (mt) of coal stock was available with thermal power plants (TPPs), which is sufficient for nine days of power generation. The numbers would have undergone a change since. This stock is being almost fully replenished by dispatch from coal companies on a daily basis and coal companies are dispatching almost 2 mt of coal daily to the power sector through various modes, such as railways, roadway and RCR (road-cum-rail).

Stock position

Coal stock at CIL was 56.9 mt as on April 26. Around 73 mt of coal stock was available at various sources such as CIL, SCCL, washeries and captive blocks, which was sufficient for almost 30 days of power generation. Coal production and offtake of CIL on April 26 was 1.79 mt and 1.97 mt, respectively.

Over and above the supply by rakes, more than 16.7 mt of coal has been offered in the last few months to power Gencos, with freedom to lift this quantity through RCR mode so that they can sufficiently stock up coal at their end. But the actual lifting was 6.75 mt or 40 per cent of the offered quantity.

Coal production from captive mines allocated to various Gencos and power companies has seen a three-fold increase over the last seven years, according to available data. Captive coal production has increased substantially from 31 mt in 2015-16 to 86 mt in 2021-22, and this year it is expected to cross 100 mt.

In spite of outstanding dues of more than ₹13,000 crore from State Gencos, coal companies have been increasing the supply; they supplied 28 per cent more coal to Gencos in 2021-22.

Coal production and offtake, which stood at at 566 mt and 572 mt, respectively, in 2013-14, rose to 777 mt and 818 mt, respectively, in FY22 — an increase of about 37 per cent in coal production and 43 per cent in offtake. Almost 400 rakes are being despatched per day, which will help build stocks.

So, there is sufficient coal available in the system. However, the challenge is to meet the volatility of coal demand as the pace of power generation has escalated to unprecedented levels — April has seen a rise of around 11 per cent over the year-ago period.

Adding to the woes is the spike in international coal prices, which has led to plants based on imported coal to run at lower capacity as well as tap domestic supplies. This has also put pressure on CIL, which has raised its production by 27 per cent and supplies to the power sector by 14 per cent during the first half of April. This would have gone up in the second half of the month.

Evacuation infrastructure

Those in the Coal Ministry maintain that with measures being taken to strengthen evacuation infrastructure, in the next two-three years most of the bottlenecks will be cleared and the coal supply chain would be eased.

While issues of coal is one side of the story, the other side is why other resources are not being enhanced further. Why gas has not taken off as a feedstock, as desired? Why are the generations from solar and wind and the rest still so small?

Instead of focussing on just one segment of fuel a more holstic approach needs to be adopted along with last mile connect. For the power sector, a model like Gatishakti — a holistic infrastructure development programme — should be considered, a critic said, adding “otherwise we will be chatting on the same story next year.”

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