India’s coal-based power plants took a breather as their inventory levels grew in May, 2022 recovering from the lows seen in April.
However, coal supply tightness is expected to continue especially with the wet monsoon round the corner, thereby providing a stern challenge to the coal producers.
As on 31 May, 2022 coal stocks at the power plants weres assessed at 23.58 million tonnes (mnt). During the month, average coal supply to the plants was recorded at 2.25 mnt/day, which was slightly higher than the consumption rate of 2.22 mnt/day.
Apart from higher supplies, the uptick in inventory levels was also supported by lesser generation schedule accorded for coal plants thanks to a surge in output from the renewables segment.
Notably, coal-fired power generation recorded a drop of 3% m-o-m to 102.42 billion units (BU) in May as against 105.64 BU in April, as per provisional data provided by the power ministry.
Impact of monsoon
The arrival of the monsoon further reduces the burden on coal-based plants due to the boost in power output from the hydro power stations, but it also affects coal supplies to an extent.
It is important to note that despite the recent developments, power plants’ coal inventories are below the year-ago levels. Not to forget, the non-power sector is also in line for cheaper domestic coal at a time global prices are soaring.
The Ministry of Coal (MoC) has informed that coal supplies to the power plants from Coal India Ltd (CIL) and Singareni Collieries Company (SCCL) would be scaled down to 47.5 mnt for June. This estimation was made taking into account the contribution from captive miners and imports.
However, keeping in mind the unsatisfactory progress from power plants towards initiating imports and sluggish output from captive mines, the onus for coal supplies would be majorly on state-run miners CIL and SCCL.
Under these circumstances, it is expected that the government would resort to more stringent measures to keep the plants operational.
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