Coal supplied by state owned CIL to the thermal plants has extended the growth on the monthly basis, as electricity demand recovers in line with the lifting of restriction imposed across the country.
Data provided by Coal Ministry indicates that dispatch to power sector attained highest total for FY ’21 as it increased 6% m-o-m to 32.76 mn t in Jul ’20 against 30.94 mn t in Jun ’20. Besides, decline on y-o-y basis was reduced to 13% compared with 37.8 mn t in Jul ’19, thereby recording its lowest drop in the fiscal.
Coal-fired plants have witnessed uptick in power generation, though the same has failed to reach the pre lock-down levels due to slow-down in industrial activities.
With a gradual reduction in coal stock, there was a considerable recovery in supply during the month supported by power producers’ increased sourcing from the auctions.
Notably, coal allocation in CIL’s special forward auction earmarked for power sector surged 5-folds to 3.2 mn t in Jul ’20 as against 0.64 mn t in Jun ’20, at a time when stockpiles had fallen 14% to 40.57 mn t at the end of July.
Measure to raise coal supply:
Coal ministry has approved supply under annual contracted quantity (ACQ) to 100% of the normative requirement for power plants, subsequent to the request made by CIL.
Normative requirement represents coal demand of a thermal power station based on its capacity, heat rate, boiler specifications and coal usage.
Earlier, the supply under ACQ was reduced to 90% for non-coastal power plants and 70% for coastal plants, where the remaining quantity was acquired through imports or from other sources.
However, with excess stock availability and sluggish demand from non-power sector, CIL had asked to amend the directives in order to raise coal supplies for power sector under this route, which has been duly accepted.
The company has highlighted that around 15 mn t would be committed upon enhancement of ACQ and this also enable it to implement the import substitution by supplying the excess volume without charging additional cost in the form of performance incentive, which has been relaxed to reduce the financial burden of power producers.
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