Coal India Ltd (CIL) has announced that the 12th tranche of coal auctions under the B (viii-a) policy of the Scheme for Harnessing and Allocating Koyala Transparently in India (SHAKTI) will commence from 24 January, 2023.
The provision enables power producers, who do not have power purchase agreements (PPAs), to procure coal linkage supply for a period of minimum three months up to a maximum of one year. However, it is required that power generated through the linkage is sold on the power exchanges or, in the short term, through a transparent bidding process.
Coal sales against this provision are carried out via a price-based bidding process on a quarterly basis.
For the latest round, the miner has offered a total of 5.41 million tonnes (mnt) of coal for sales for January-March 2023. CIL’s subsidiary – Mahanadi Coalfields (MCL) – has chipped in with the highest offering of 3.83 mnt, while the remaining volume has come from the mines of SECL, NCL, CCL and WCL.
Strong power demand weighs on coal inventory
Demand for power has gradually increased with the onset of winter as well as continued momentum in manufacturing activity. This, in turn, has pushed the coal-fired power plants to raise their generation schedule.
As per data provided by the Central Electricity Authority, these plants have generated electricity at an average of 3,312 million units/day (MU/day) during 1-16 January, 2023, registering a growth of 16% y-o-y compared to 2,861 MU/day in the same period of January, 2022.
An aggressive procurement is expected in the upcoming round of coal sales as the power producers will look upon to replenish their inventory to gear-up for the peak summer season. This becomes particularly important at a time when stock level at the plants has started to dwindle.
Evidently, coal stocks have dropped slightly to 31.97 mnt as on 16 January as against 32.32 mnt in end-December, after the plants had recorded an uptick in inventory levels for three successive months.
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