Coal India to ramp up fuel supply to power plants

The development assumes significance in the wake of power plants across the country grappling with coal shortages

State-owned Coal India Ltd (CIL) on Wednesday said it will augment fuel supply to power utilities of the country to rein in the lowering coal stocks and build them up to adequate levels.

The development assumes significance in the wake of power plants across the country grappling with coal shortages.

For the past three days, the company has pushed up its offtake to power plants to 1.4 million tonnes (MT) per day, CIL said in a statement.

"CIL has taken up this on a mission mode. Availability of coal and subsequent supplies will be ramped up. Despatches to coal-fired plants from October onwards are aimed at 1.5 MT per day going beyond 1.6 MT in due course," CIL Director (Marketing) S N Tiwary said.

With this, normalcy could be expected soon.

A sudden spike in power generation in the second week of August triggered the increased appetite for coal. As a result, coal demand outpaced the supplies leading to depletion of stocks at the power stations.

Had the power utilities maintained the Central Electricity Authority (CEA) prescribed normative stock of 22 days, the low coal stock situation could have been averted.

Despite monsoon challenges and non-payment of outstanding dues, CIL supplied 243 MT of coal to power utilities during April-September, which is an all-time high recorded for this time frame for any year.

Compared with around 196 MT supplied to power utilities during the same period of the previous fiscal, the company posted a strong 24 per cent growth with an increase of 47 MT in volume terms.

"Compared with COVID-19-free period of April-September 2019, the growth was over 11 per cent when the supplies stood at 218 MT," the statement said.

Coal stocks were at a comfortable level of 28.4 MT at the beginning of the fiscal. And, even at the end of July, coal stock at power utilities was 24 MT at par with the previous five-year average of the same period. It was in August that stock at power plants fell by over 11 MT.

The recent pick-up in coal demand is linked to several reasons. Primarily, imported coal-based power plants worked at a low capacity curtailing their generation due to an increase in the price of imported coal and its shipping rates. This has resulted in the demand shift to the domestic coal-fired plants. The fact that they have regulated their coal intake further exacerbated the situation.

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