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NEW DELHI : India’s 72 coal-fuelled power projects have less than three days of stocks, as of 1 October. Also, 50 plants have coal stocks ranging from 4 to 10 days, and 13 projects have fuel stocks to sustain electricity generation for more than 10 days, according to power ministry officials.

This assumes significance given that of India’s installed power generation capacity of 383.37 gigawatt (GW), the coal-fuelled projects account for 53% or 202.67 GW. India’s power sector is the largest consumer of coal in the country, with state-run Coal India Ltd (CIL) being the largest miner of the fossil fuel.

Coal stocks are low at power projects due to an unprecedented increase in electricity demand with India's economy revival, heavy rains in September impacting coal production and dispatch, a spike in imported coal prices resulting in lower electricity generation from imported coal-fuelled coastal power projects thereby increasing dependence on domestic coal and lower electricity generation by other fuel sources. Also, not building up adequate coal stocks before monsoon and non-payments of coal dues from states such as Maharashtra, Rajasthan, Tamil Nadu, Uttar Pradesh and Madhya Pradesh resulted in inadequate supplies.

This comes in the backdrop of a CIL statement on Wednesday, which stated that if thermal power generation plants had maintained the 22 days fuel stocks prescribed by the Central Electricity Authority (CEA), the low coal situation at thermal power projects could have been averted.

“Power demand has seen a robust recovery after the second wave of covid-19. As of August this fiscal, it was up 16% year-on-year and 3% over the corresponding period of fiscal 2020, or the pre-pandemic level," a CRISIL report said on Wednesday.

Due to coal shortage for a 13 gigawatt (GW) capacity in August, the electricity prices on power exchange shot up to Rsm20 per unit. The prices have now come down to 7 per unit, given that the coal supply shortage is for 6.96 GW capacity. Also, the union power ministry has asked India’s apex power sector planning body CEA to specify the mandatory coal stocks to be maintained by power plants. 

In the event of such stocks not being maintained at projects, they will be disincentivized through lower priority for coal supplies. Also, lower priority for coal supplies will be accorded to those generation companies having pending coal dues.

“The unprecedented increase in coal-based power coupled with supply shortage during monsoon and less stock build-up in Apr-June,2021 has led to the depletion of coal stocks in power plants which were 13 days (23.97 MT) as on 1 Aug 2021 and now 4 days (8.08 MT) as on 1 Sept 2021. Out of 135 power plants monitored on daily basis, 72 plants have coal stocks of less than 3 days, 50 plants have stocks from 4 to 10 days and 13 plants have stock of more than 10 days," said the power ministry official cited above.

Also, India stopped coal supplies for a week to plants having more than 15 days of stock to free up around 17.7 million tonnes of fossil fuel, to be redistributed to power plants having low stocks.

“Power consumption for the period August-September has progressively increased from 106.6 BU per month in 2019 (non-covid year) to 124.2 BU per month in 2021. During this period the share of coal-based generation has also increased from 61.91% in 2019 to 66.35% in 2021. As a consequence, total coal consumption in the month of August-Sept, 2021 has increased by 18% in comparison to corresponding period in 2019," the power ministry official said.

“In our view, coal inventory at thermal plants will improve only gradually by next March. For this fiscal, it will hover around 10 days compared with the two-year average of around 18 days," the CRISIL report added.

CIL on its part has said it will increase fuel supply to power utilities grappling with coal shortages. Some of the measures to ensure uninterrupted electricity supply by easing out coal stocks inlcude sourcing coal from captive coal mines. The demand from the power sector is expected to account for around 700 mt this year.

“Coal stocks were at a comfortable level of 28.4 MTs at the beginning of the fiscal and even at the end of July coal stock at power utilities was 24 MTs at par with the previous five year average of the same period. It was in August that stock at power plants fell by over 11 MTs," CIL said in its Wednesday statement.

India’s overall coal requirement is expected to go up to 1,123 mt by 2023.

“So far in the last 10 years, maximum domestic coal supplied was 582 MT in FY 2018-19 and with imported coal of 61.7 MT, total receipt was 643.7 MT leading to the highest consumption of 628.9 MT in any FY. Ministry of Coal (MoC) and CIL were informed on 08.04.2021 about requirement of 678 MT domestic coal and 45.3 MT of imported coal in FY 2021-22 with total coal requirements of 723.3 MT," the power ministry official said.

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