Domestic miner-Coal India Ltd (CIL) has extended its support to the power sector, as three of the major subsidiaries have come up with bulk offering via auction route.
On the back of strong demand for coal based power generation, the company has increased the volume being offered in the special forward auctions, earmarked specially for the power producers.
In a latest development, the top-3 coal producing subsidiaries- Mahanadi Coalfields Ltd (MCL), South Eastern Coalfields Ltd (SECL) and Northern Coalfields Ltd (NCL), have offered a total quantity of 12.74 million tonnes (mn t) of coal for the special forward auctions scheduled for Jan’22.
Notably, this is the first time when these companies have together lined-up auction for the power sector since Aug’21. Besides, the quantity in Jan’22 is the highest offered by them in a monthly auction for FY’22, with major volume of 9.72 mn t offered from MCL.
Grade-wise offer
Apart from G7-G8 grades from NCL and a small of lot of G9 offered from SECL, the rest of the volume falls under the low calorific value in the range of G10-G16.
In case of MCL, there is a variation in reserve prices for the similar grade coal based on the mode of dispatch. The higher price is set for the rail-mode.
Quantity in Metric Tonne (t) | Price in INR/t
It is important to note that CIL has a fixed price across grades termed as the “notified price” upon which individual subsidiaries apply an add-on charge (upper cap) in terms of a percentage to fix the reserve price in the auctions.
Power demand on the rise
Power generation from coal-based plants increased 13% m-o-m to 87.83 billion units (BU) in Dec’21, marking recovery from the previous month when it fell to its lowest in FY’22.
Besides, a steady decline in hydro-based electricity and limited support from nuclear and other source of conventional power, added more pressure on coal-based plants.
As a result, coal’s share in the conventional energy mix rose to an 8-month high of 83% in Dec’21, indicating a significant progress against the lows of 73% in Sept’21.
With higher supplies, coal inventory at plants have improved to a 5-month high of 23.37 mn t at the end of Dec’21. However, it was still 43% lower against 40.81 mn t assessed in the year-ago period.
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