CIL offers additional coal to power plants as stocks decline: Here's what led to critically low levels

State-owned Coal India Limited (CIL) is reportedly allowing power plants that have fuel supply arrangements with the company and its subsidiaries to procure additional coal beyond their annual contracted quantities.

The Times of India reported on Sunday that the CIL move comes at a time when stocks at thermal power stations continue to decline. Citing data from the Central Electricity Authority (CEA), the report added that at least 57 power plants were reporting critically low coal stocks on Friday. The combined stock stood at 27.1 million tonnes (MT), equivalent to 47 per cent of the 57.7 MT recommended level. This marked a further deterioration from Saturday, when TOI reported that 50 of the 190 coal-fired plants had stocks below 25 per cent of the recommended requirement.

Why are power plants witnessing a shortage?

According to the Coal Ministry, prolonged rainfall disrupted mining operations at CIL's mines, leaving several coal seams wet and sticky and causing lower mine sections to become submerged. As conditions improve, pumping operations are helping restore the affected areas, while repairs to internal haul roads are underway to facilitate the movement of coal, ANI reported.

What's next?

As intense rainfall over coal-producing regions eases, the Coal Ministry expects mining and safety-related disruptions to subside, allowing coal production, loading and transportation from CIL's mines to gather pace in the coming days.

CIL subsidiaries are also working to strengthen coal evacuation through road and rail routes, the ministry said. Power plants with Fuel Supply Agreements can procure additional coal beyond their contracted annual quantities through road transport, alongside their existing rail supplies.

Despite disruption, coal production shows signs of recovery

There are already signs of an improvement in production. CIL's average daily output stood at approximately 1.36 MT during the first three days of September amid rain-affected conditions, before rising to 1.7 MT on Friday, despite only a single day's respite from rainfall.

Improving mine conditions have also supported overburden removal, an important indicator of future production readiness. Average daily overburden removal rose from 2.5 million cubic metres in the first three days of September to 4.1 million cubic metres on Friday.

Despite the recent disruption, CIL's overall coal supplies have remained higher than last year, according to the ministry.

"Despite prolonged spells of rain through July and Aug, particularly across the East-Central parts, CIL maintained a steady supply run. During April-Aug of the current fiscal, CIL supplied 322.9 MT of coal, 6.7 per cent higher than the 302.6 MT supplied during the corresponding period last year."

According to the ministry, CIL supplied 322.90 MT during the April-August period of the current fiscal, marking a 6.7 per cent increase from 302.60 MT in the corresponding period last year. In August alone, supplies rose 5.5 per cent year-on-year to 60.60 MT, while supplies to the power sector climbed 4.5 per cent to 48.46 MT.

(with agency inputs)