India: Coal supplies rise, but over half of thermal units still have stocks at critical levels

The power and the coal ministry have said that the coal supplies to the power plants may not face a crunch this monsoon season with power plants building up inventories. However, at 91 out of country’s total 173 thermal power stations, coal stocks are in a critical situation.Of these 91 plants, 8 are non-operational and another 8 are dependent on imported coal. Coal imports have not yet picked up to the extent required to create inventory of half the normative level for the imported coal-based units.

The Central Electricity Authority (CEA) data show 158 non pit-head power plants, with an aggregate generation capacity of 16,247 MW, have coal stocks equivalent to 32% of the normative requirement at 58,909 thousand tonne but 15 pit head plants, with an aggregate capacity of 34,100 MW, have stocks equivalent to 89% of the normative requirement at 8, ,058 thousand tonne.

Nevertheless, the coal and power ministries are betting on factors like dip in peak power demand during the monsoon, India Meteorological Department’s (IMD’s) forecast of less rainfall in the coal bearing areas, imports of 2 MTs adding to the stock of domestic coal, and most importantly Coal India’s incremental coal production and supplies that would help manage the power plants to meet the power requirement.Peak power demand, according to the CEA data, has fallen 13% with the onset of monsoon during the later half of this month from 210,793 MW, the highest ever peak demand recorded on June 10. Peak demand hovered at around this level early this month.

As per CIL officials, the company’s current per day production is hovering between 1.7-1.9 MT, and would not be hampered this monsoon since the biggest coal producing areas of east and central region are likely to have rainfall below the long term average this year causing fewer disruptions to mining activities.

West Bengal, Jharkhand, Orissa and Chattisgarh account for 75% of the country’s annual coal output. Besides, CIL has already achieved 97% of its progressive target between April and June this year with an incremental production of over 30 MTs at present.CIL chairman Pramod Agrawal told FE that the endeavour was to close the first quarter with 35 million tonne (MTs) increase over same quarter of FY 21.
“Pursuing a target of 700 MTs in FY23, we began the fiscal with an asking growth rate of 12.4%. But with a strong output performance during the April-June this year, the annual asking growth rate has come down to 9% now,” Agrawal said.

This incremental production has started, adding to the stocks at the plant heads, soon after peak power demand dipped. The 9% growth in production was likely to be maintainable while mining during the monsoon this year and daily despatches won’t be a problem since rail , road and first mile connectivity projects were well in place for daily evacuation of coal, a CIL official said.

Of the country’s average 2.12 MTs of daily despatches, CIL accounts for around 1.8MTs. But the growth in production was all likely to go up once again once the monsoon was over. The PSU miner has drawn up month-wise plans to monitor the production in its attempt to reach the target, Agrawal said.

CIL was itself maintaining an inventory of 44 MTs and the power plants have been able to build up a stock of 26 MTs. Although, this was far less than 100 MTs of inventory, which CIL had with itself when the country’s power sector fell under acute shortage of coal, lifting coal had been an issue that time unlike this time, when power plants have been more or less regularly lifting coal and narrowed the gap of demand supply mismatch to a great extend.

However, a section of the CIL officials point out that coal inventories could have been more at the plant heads, provided the power plants ran with greater efficiencies. CIL supplies coal at an 85% plant load factor (PLF) but the average PLF has not exceeded 60-65% over the last one year. On an average, specific coal consumption for producing 1 unit of power should 0.64 kg whereas most power plants, especially the independent power producers, burn 0.7kg of coal for producing 1 unit of power. This is a great impediment to building up stocks, a CIL official said, although a power ministry official argued that coal quality detoriation prompts power plants to operate at lower efficiencies to some extend.
Source: Financial Express