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

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 Hindu businessline
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