Surge in power demand has compelled domestic coal companies to scale up their supplies this fiscal, as the country breaches an important landmark at a much faster rate.
Data provided by the coal ministry indicates that coal dispatches reached 500.27 million tonne (mn t) on 25 Nov’21, a milestone that was attained towards the first week of January last fiscal.
Coal India Ltd (CIL) accounted for 82% of the overall supplies, while the remaining volume was catered by Singareni Collieries (SCCL) and mixed bag of captive and merchant miners.
In contrast, production increased at a slower pace, with cumulative output till date marked at 428.58 mn t.
Revival in power demand comes as a boon
Coal is the major source of power generation and its importance again resurfaced this year at a time when the country witnessed substantial rise in demand post-relaxation in Covid restrictions.
Notably, coal-fired generation increased 16% y-o-y to 594.23 billion units during Apr-Oct’21 against 511.87 BU in Apr-Oct’20. Besides, its share in the total energy mix rose from 64% to 67% in the period.
As a result, coal dispatches in the range of 60 mn t was maintained in each of the first seven months of FY’22 (Apr-Oct’21).
New record in the making?
Progressive increase in annual coal dispatches was halted due to dull market conditions induced by Covid. Incidentally, supplies were down for the second successive fiscal in FY’21.
However, the country is well set to register a y-o-y rise in dispatches this year and the volume could possibly surpass the highest total of 732.79 mn t that was attained in FY’19.
The demand for power has slowed down with the onset of winter. However, if coal inventory falls below normative levels then power plants would be compelled to push for higher supplies.
In addition, there is prevailing strong demand from the non-power sector as it looks to safeguard its operations from costlier imports.
At present, coal in excess of 2 mn t are being dispatched by the producers on a daily basis which are at par with the production levels. But, going forward, the country would require production to outstrip the dispatch volume in order to remain self-sufficient to meet the rising demand.
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