Coal India to supply more coal to power plants than annual contracted quantity

State-run Coal India Ltd (CIL) has decided to supply more coal to power plants than their annual contracted quantities (ACQs).

The world's largest coal mining company said in a statement on Tuesday that it had done away with the provision that allowed coal supplies up to a maximum of 120% of ACQ to power plants and independent power producers (IPP). This applies to the power-generating companies that have signed fuel supply agreements (FSA) embedded with such an enabling clause.

The development would benefit power plants that prefer to lift higher quantities of coal beyond their stipulated ACQ.

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"The fillip for CIL is that it would boost its supplies at a time when coal demand is showing signs of slackening," said the statement.

According to the company, its mine pitheads currently have a coal stock of 72 million tonnes (mt), 47% more than the 49mt as of 12 August 2023.

"Satisfying the coal demand, supplies to coal-fired plants peaked at an unprecedented 619.7mt in 2023-24, meeting 101.6% of the demand projected. Compared to 586.6mt off-take to the power sector in 2022-23, the increase in volume terms was 31.9mt, which is a growth of 5.4%," the statement said.

Of the country's 153 domestic coal-based power plants, CIL has long-term linkages with 127 plants for 592mt. The country also has 54 domestic coal-based IPPs, and CIL has linkages with 50 of them for 155.7mtpa.

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In 2023-24, domestic coal-based power plants generated 1,177 billion units (BU). Of this, about 78% was fueled by the coal from CIL sources, the company said.

The development also comes at a time when the government has outlined ambitious plans to increase India's coal-based power generation capacity in a bid to meet the increasing power demand.

The government plans to add 80 gigawatts of thermal capacity by 2032. Currently, India's installed coal-based power generation capacity stands at 210.96 GW.

CIL shares on BSE closed 0.51% lower at ₹521.30 on Tuesday. The Sensex ended the day with a 0.87% decline.

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