Coal stocks at power plants reach 9.02 mt, expected to reach 6 days generation stock by Oct-end
PremiumThis is rolling stock with coal supplies to India’s power plants being increased to help fuel stocks reach 10 mt by Deepawali
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New Delhi: In a relief to coal-fuelled power projects, the stocks at plant end have reached 9.02 million tonnes (mt) and are expected to reach stock levels to sustain six days of electricity generation by end of October, said two government officials aware of the development.
This is rolling stock with coal supplies to India’s power plants being increased to help fuel stocks reach 10 mt by Deepawali as reported by Mint on 19 October.
The playbook being followed involves coal supplies to India’s power plants to be increased to 2.2 mt daily and follows after a meeting of coal minister Pralhad Joshi, power and renewable energy minister Raj Kumar Singh and railways minister Ashwini Vaishnaw on 19 October. This 2.2 mt of coal will be ensured every day from all domestic sources including state run Coal India Ltd (CIL), Singareni Collieries Company Limited (SCCL) and captive coal mines.
India’s 135 coal-fueled power projects totalling 165.066 GW had five days of stock, as on 25 October, according to the Central Electricity Authority (CEA). Of these, 119 coal projects totalling 129.86 GW had four days of stock and 16 plants located near coal mines totalling 35.2 GW capacity have six days of fuel stock.
“We expect the coal stock to reach six days level by month end," said one of the two government officials cited above requesting anonymity.
After depleting to 7.23 mt on 8 October the government has been trying to build coal stocks at power projects. The stocks touched 7.6 mt on 20 October and touched 8.05 mt on 23 October. The coal fuel stock level was 9.028 mt on 26 October. In 2018-19, the fuel stocks had also fallen to 10.1 mt at power projects.
A spokesperson for union coal ministry declined to comment.
The depleted fuel stocks at power plants have led to concerns about a possible electricity shortage. This assumes significance given that coal fuelled power projects totalling 202.22 gigawatt (GW) remain the mainstay of India’s power generation and account for more than half of India’s power generation capacity. The daily coal offtake from CIL mines is being ramped up after Durga Puja as more workforce available at the coal fields.
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With power plants burning 1.85-1.87 mt of coal every day to generate electricity, the playbook decided is to stock 3 lakh tonne per day resulting in an addition of 3 mt fossil fuel stock over a period of 10 days. Also, with lower electricity demand expected in November, the plan is to build up an additional stock of around 6 mt next month, taking the total fuel stock to 16 mt by end November.
A tenth of India’s coal fuelled power projects is still vulnerable to outage despite temporary easing of electricity demand in the country, CRISIL Ratings said in a statement on Wednesday.
“About 10% of the 209 GW (20 GW) capacity of coal-based thermal power generation companies (gencos) in India remains vulnerable to outage amid surging demand for coal. Despite the recent dip in demand (10% over October 16 and 17) due to heavy rains, shortage of coal persists with inventory at 5 days for these power plants," the statement added.
The coal shortage has coincided this year with a sharp spike in electricity demand, growth in number of electricity consumers and inadequate stocking up by power projects before monsoon. Also heavy rains in September impacted coal production and dispatch and non-payments of coal dues also contributed towards inadequate supplies. India’s daily electricity consumption has crossed 4 billion units , resulting in a 18% spike in coal consumption during August-September 2021 compared to the corresponding period in 2019.
“To be sure, coal shortages have occurred in the past as well due to monsoon, lack of evacuation infrastructure, and rake unavailability. These have been partly addressed through higher imports, rationalization of mines, ramp-up of production, creation and improvement of evacuation infrastructure, and liberalization of commercial mining norms. In fiscal 2020, India met ~89% of coal required for thermal generation from domestic sources and balance from imports," the statement added.
Global energy markets are in frenzy with a spike in energy prices across fuel sources such as crude oil, gas and coal.
“We expect high global coal prices to make imports dear and domestic e-auction premiums to remain elevated over the next few months, till supplies stabilize. In this milieu, 20 GW private capacities (out of 209 GW coal-based capacities) will be the most vulnerable as these depend heavily on the open market or imports for coal, and most have committed tariffs for the power sold to utilities," Ankit Hakhu, director, CRISIL Ratings said in the statement.
While fuel supplies to power plants has improved, its impact is now being felt by other coal fuelled industries such as aluminum that claim inadequate fossil fuel to fire their smelters for producing the non-ferrous metal.
India’s aluminium industry has upped its pitch for the restoration of coal supplies, with lobby group Aluminium Association of India seeking principal secretary to the Prime Minister P.K. Mishra’s intervention for the same.
India has the world’s fourth largest reserves and is the second-largest producer of coal. While CIL’ annual production target is 660 mt for the current financial year, the coal off take is expected to be 740 mt. Around 39 mt is available at CIL mines for transportation to power plants. According to the union coal ministry, India’s largest coal miner may be unable to meet its reduced annual production target of 660 mt.
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