NTPC’s coal tender has raised many eyebrows as it is seen as an import driver at a time when the country desperately tries to cut import bills amid the rupee devaluation, but with the hand-to-mouth coal stock situation the Company has no option but to look at imports with seven of its major power plants having fuel stock of zero days.
Surge in Power Demand further Aggravating Coal Shortage:
NTPC’s coal stock levels have been further depleted with a surge in power demand. As per the data provided by power ministry, output from thermal powers has recorded a 5.4% y-o-y rise in the April-October period whereas a whopping 11% rise was recorded in October itself.
As on 14 Nov’18, seven major NTPC power plants have coal stock of ‘zero’ days, data from the Central Electricity Authority shows. These include-Sipat, Farakka, Kahalgaon, Kudgi, Simhadri, Solapur and Bongaigaon.
Interestingly, the first three aforementioned plants are pit-head stations, suggesting that production at the mines dedicated to specific power plants are not being able to cater to the necessary requirements.
The ongoing coal crunch strongly addresses the shortage of domestic coal in the country.
To tackle the fuel shortage, NTPC has subscribed to CIL’s additional coal supplies via roadways, paid advance payment of INR 10,000 Crore to Railways to receive coal supply at unrevised rate and even started coal production in its captive mines.
Independent power producers have been foul crying about the preferential coal allocation to NTPC’s power plant, but at a time when the country’s largest power producer is facing the wrath of coal shortage, the private power producers would be more compelled to imports to meet their demand.
India’s non-coking coal imports as a whole are expected to grow 19% Y-o-Y to 182 MnT in FY19.
Coal Crisis Underpinning NTPC’s Earnings: The company’s remarkable operational figures at the end of half year period have been overshadowed by the loss incurred in total income which was largely due to the unavailability of coal.
During H1 FY19 (Apr’18-Sep’18), NTPC reportedly generated 135.199 BU power against 129.457 BU generated in the corresponding period of the previous year, an increase of 4.44% Y-o-Y, represented by 5.742 BU.
NTPC’s coal stations had achieved PLF of 75.29% as against National PLF of 60.67% during the half year period.
The company’s net profit, however, slipped 1.1% Y-o-Y to INR 2417.6 Crore at the end of Q2 FY19, which was also 6.17% lower Q-o-Q from 2576.7 Crore from Q1 FY19. Net profit at the end of half year period of FY19 was INR 4994.3 Crore, down 0.9% Y-o-Y from INR 5040.05 Crore in H1 FY18.
Low fuel stock levels at NTPC’s power plants currently marked at 3.942 MT as on 14 Nov’18 from a high of 6.9 MnT, have directly led to under recovery from its Mouda, Simhadri and Kudgi power stations which have been facing acute shortage of coal.
Besides, maintenance activities at the Unchahar station has also contributed to the under recoveries, since being out of operation from the time when it had met with an accident last year.
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