Acute coal shortage faced by several power plants has prompted domestic miner Coal India Ltd (CIL) to step up its supplies to the power sector.
But this has come at the expense of the non-power sector whose supplies were reduced in a bid to pull power plants out of criticality.
The miner witnessed a decline in coal dispatches by 4% m-o-m to 48.73 million tonnes (mn t) in Aug’21 compared to 50.59 mn t in Jul’21 due to the monsoon.
Supply constraints due to rainfall had weighted down CIL’s dispatches to individual sectors too. Nevertheless, the share of the power sector in the overall volume was gradually increased to 79% from 77% over the period.
Notably, dispatches to the power sector saw a marginal 1% drop m-o-m to 38.61 mn t in Aug’21 but decline in supplies to the non-power sector was more prominent as it fell 13% m-o-m to 10.12 mn t.
Coal movement to non-power sector decreases
CIL had registered its lowest coal movement of 241.8 rakes/day for this fiscal in Aug’21.
However, the company maintained loading of 210.8 rakes/day for the power sector last month, which, in fact, was slightly higher than 210.6 rakes/day recorded in Jul’21. This indicates that coal rakes meant for the non-power sector were reduced in August.
Recently, the Aluminium Association of India (AAI) objected to CIL’s decision of reducing supplies and railway rakes for captive power plants, reportedly resulting in a coal crunch for the aluminium industry.
The break-up of subsidiary-wise coal rake movement indicates that Eastern Coalfields (ECL), Central Coalfields (CCL) and South Eastern Coalfields (SECL) had supplied comparatively lesser volumes to the power plants during Aug’21. The situation worsened when power demand rose abruptly, leading to a drastic fall in inventory levels.
At the start of Aug’21, power plants had a coal stock of 23.97 mn t, sufficient for 13 days of power generation. This reduced to 12.76 mn t at the end of the month as a result of increased coal consumption.
Outlook
Despite best efforts made by the government to tide over the present situation, coal stocks at power plants are currently assessed at 11.28 mn t as on 14 Sep’21, sufficient for six days.
In order to maintain normative stock for 12 days, CIL is expected to divert more coal rakes to the power plants.
As far as the non-power sector is concerned, these are likely to meet their requirement via spot/exclusive auctions at a time when imported coal prices are very high.
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