India’s coal-based power plants have registered generation volume in excess of 100 billion units (BU) to support the sustained momentum of economic activities during January 2023.
As per tentative data provided by the Power Ministry, coal-based power generation increased 12% y-o-y to an 8-month high of 101.56 BU in January, 2023 as against 90.77 BU in January 2022. The double-digit growth was recorded for third straight month.
It is important to note that demand for power generally remains low during October-January on account of cold weather conditions. Demand gradually rises when temperatures begin to soar from March onwards.
In this regard, the power generation mark of 100-BU was attained by coal utilities early this fiscal (in January) compared to March last fiscal.
During October-November, peak demand fell to 187 gigawatts (GW) from levels of 200 GW in September 2022. However, it has recovered and touched the levels of 210 MW in January 2023.
To cater to robust demand, these utilities scaled up generation levels to 3.28 BU/day in January as against 3.18 BU/day in December.
Sluggish pace of inventory build-up
The record generation has slowed down the inventory build-up at the power stations as the utilities have struggled to accumulate enough coal at a time demand exceeded supply.
At the end of January, coal inventories have gradually improved to 33.13 mnt compared to the lows of 26.11 mnt seen in September 2022. However, in absolute terms, a mere 0.8 mnt coal was added to the inventory during January, which is the least compared to the previous months.
The current stock is in a better position compared to previous year’s level of 25.31 mnt, but is comparatively lower compared to 37.04 mnt in January 2021 and 39.16 mnt in January 2020.
This scenario poses a worrying sign for the power sector going into the peak summer season.
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