Indian coal-fired power stations are on the road to recovery, as they continue to replenish inventories that had declined to significantly low levels this year.
Data provided by the power ministry shows that coal stocks at plants having linkage contracts have increased to 16.22 million tonnes (mn t) as on 22 Nov’21, and which would last for nine days, marking a remarkable progress from the period when the inventory had fallen to a mere four days of usage.
Notably, the stocks have risen to the highest level since 20 Aug’21, in tandem with the improvement in coal supplies.
Besides, the build-up in inventory level was further aided by a slowdown in electricity consumption with the onset of winter. In fact, the daily power consumption has decreased 13% m-o-m to 3,323 million units (MU) in the first 23 days of Nov’21 compared to 3,748 MU in the corresponding period of Oct’21.
As on 22 Nov’21, the plants have received 1.78 mn t of coal against the normative requirement of 1.63 mn t.
Relief for coal buyers
A gradual build-up in coal stock at power plants has come to be a major relief for the coal consumers with domestic coal miner Coal India Ltd (CIL) increasing its offerings via the auction route.
After a brief absence, CIL subsidiaries put on sale a total of 17.07 million tonne (mn t) of coal under different auction schemes during 1-13 Nov’21, which has already exceeded the combined volume offered in the past two months.
Latest auctions
South Eastern Coalfields Ltd (SECL) has planned to sell a bulk of 1,328,200 tonnes (t) of coal under the spot scheme on 24 and 26 Nov’21. Earlier, Western Coalfields Ltd (WCL) had also concluded one spot auction for sale of 151,400 t coal on 23 Nov’21.
In addition, Central Coalfields Ltd (CCL), extending support to the non-power sector, has scheduled an exclusive auction for sale of 265,000 t on 29 Nov’21.
It is important to note that both CCL and WCL have resumed auction sales in Nov’21, after a month’s gap.
The present inventory levels are still far lower than the normative stocks of 14 days which are required to be maintained at power plants. Till then, coal supplies for the non-power sector are expected to remain curtailed.
However, with the easing of the critical stock position at power plants, CIL is likely to raise the frequency of domestic coal auctions to cater to the inadequatly-supplied end-user segments, going forward.
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