Domestic miner Coal India Limited (CIL) has augmented its supplies to the non-power sector, in order to meet the surging demand from the same.
Currently, the company is supplying coal at an average of 0.34 million tonnes (mnt)/day, which is significantly higher than the lows of 0.27 mnt/day seen in Sept’21 when dispatches had fallen as a result of the monsoon.
Considering the abrupt rise in power demand, the company has made decent efforts to cater to the non-power sector. However, these have proved insufficient due to the shortfall in imports fuelled by spiralling international coal prices.
On its part, the company dispatched 101.7 mnt of coal to the non-power sector in the first 10 months of FY’22 (Apr’21-Jan’22), up by 8% compared to 94 mnt in the corresponding pre-Covid era of FY’20. Even, the 10-month dispatches of FY’22 were 11% higher than that in FY’19-when CIL had recorded its highest-ever total coal dispatched in a fiscal.
Still, overall dispatches this fiscal remain 3% lower y-o-y compared to 105 mnt recorded in the corresponding period of FY’21.
Reason for low dispatches
Indian power demand has shown striking contrast in wake of Covid, which has significantly affected CIL’s coal supply pattern.
As a result of the Covid outbreak in FY’21, power demand had fallen drastically. This was the time when CIL had stepped up coal supplies to the non-power users in view of subdued demand from the power sector.
Besides, the end-user segment had opted to lift higher volumes as e-auction sales were capped at the notified price in the first half of the fiscal.
However, with gradual ease in lockdowns, the country saw unprecedented surge in power generation during FY’22, the growth rate being the highest in a decade.
Moreover, there was additional burden on the company to enhance its supply to the domestic coal-based power plants which had to compensate for the generation loss from the imported coal-based plants.
Notably, power generation from the plants based on domestic coal has increased 17% y-o-y during Apr-Jan’FY’22. On the other hand, power generation by imported coal-based power plants was down by 48%.
These factors have compelled CIL to meet the power sector’s coal demand on a priority basis, thus depriving the non-power sector a part of their share of supply. But, with surplus buffer stock of more than 37 mnt available at pit-head mines, supplies to the non-power sector are expected to further increase, going forward.
Leave a Reply