A decline in coal-fired power generation saw Coal India Ltd’s (CIL’s) dispatches to the power sector falling to a seven-month low in Jun ’21. Power plants preferred bare minimum supply to meet their demand.
Data provided by the coal ministry indicates that dispatches to the power sector fell 9% m-o-m to 39.79 mn t in Jun ’21 compared to 43.53 mn t in May ’21.
After an encouraging start to the fiscal, generation from coal-fired plants slowed down in the later months despite higher dispatch volumes compared to the previous fiscal. Moreover, increased availability from hydro sources amid the arrival of the monsoon also curtailed electricity output from the coal-fired plants.
Notably, coal-fired generation decreased 3% m-o-m to 78.74 billion units (BUs) in Jun ’21 compared to 80.88 BU in May ’21, the lowest monthly total for FY ’22 so far. In this month, share of coal in the total energy mix went down from 78% in May ’21 to 74% in Jun ’21, while the share of hydel power plants gradually increased from 15% to 20%.
Overall, coal-fired generation in the first quarter of FY ’22 (Apr-Jun) grew 29% y-o-y to 256.72 BU compared with 198.93 BU in the first quarter of FY ’21, but it was still 4% lower than the pre-Covid levels of 266.60 BU seen in the first quarter of FY ’20.
Improvement on the cards
While coal demand from the power sector is struggling, gradual improvement in electricity consumption pattern shows that power plants would seek higher coal supply in the coming months.
With soaring temperatures and a large part of the country yet to receive adequate monsoon showers, the country’s peak electricity demand has been on an upward trajectory. All-India peak electricity demand surged beyond the 200-gigawatt (GW) mark on 7 Jul ’21, registering a new record.
Before that, peak demand of 197.078 GW was recorded on 6 Jul ’21, which was preceded by a high of 191.24 GW on 30 Jun ’21.
In addition, lower-than-expected power generation from hydro sources, down 13% y-o-y in the first quarter of FY ’22, is expected to give a boost to the generation programme of the coal-fired plants which are running at limited inventory levels.
As per the Central Electricity Authority (CEA), coal stocks at power plants were assessed at 39% lower y-o-y at 28.72 mn t at the end of Jun ’21, which further depleted to 26.17 mn t as on 8 Jul ’21.
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