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Business News/ News / India/  ‘Enough coal supply to meet power demand this summer’

‘Enough coal supply to meet power demand this summer’

Currently, coal stock at thermal power plants, pitheads and those in transit is 108 million tonnes, which is 28% higher than 28 March 2022.

Coal secretary Amrit Lal MeenaPremium
Coal secretary Amrit Lal Meena

New Delhi: The coal sector is prepared to meet the anticipated record power demand in the summer months as coal production is set to surpass consumption growth for electricity, said coal secretary Amrit Lal Meena in an interview. A cost-effective plan to ship coal to western states from coal-producing eastern states by sea, which has already taken off, will add to logistical support. Edited excerpts:

How prepared is the coal sector to meet the anticipated high demand in April-May?

The power (consumption) growth is about 11%. So, naturally their requirement of coal would be 11% more. We are producing about 15% more than last year and whatever has been the projected coal requirement is being produced. Also, for the first quarter of the next (financial) year and the second quarter, that is the monsoon season, whatever is projected as requirement, we are comfortable in terms of our production capacity. We will be producing adequate coal to meet the requirement of the power sector during Q1 and Q2.

Further, the Rajmahal coalfields in Jharkhand have also started production. It was stuck for many years. The movement of coal to captive plants of Kahalgaon and Farakka—several rakes per day—was done by Eastern Coalfields. With the support of the government of Jharkhand that interruption has been removed and, resultantly, coal production has started from that area. Currently, coal stock at thermal power plants, pitheads and those in transit is 108 million tonnes, which is 28% higher than 28 March 2022.

The power ministry has directed 6% blending of imported coal. Will there be any need of imported coal if domestic supplies are adequate?

If you look at the analysis of the coal that has been imported by the gencos (in Q4), it has not been imported by coal-producing states such as Chhattisgarh, West Bengal, Jharkhand, Odisha and Madhya Pradesh.

In states that are located near the coal producing regions, the infrastructural gaps are less. So, they are able to meet demand. But wherever coal has to be transported to distant places, because of a little infrastructural gap, the state gencos and NTPC have imported some coal.

How do you expect asset monetization to progress in the next financial year?

In FY23 we will be achieving over 100% of our target. The target was at 30,000 crore. We will be touching almost 50,000 crore. Next year’s target is yet to be fixed, but as far as the coal ministry is concerned, we will have a higher target to achieve. The surplus monetization was possible due to coal mine auctions. Our asset monetization realization next year will be a little higher. We are coming out with the next round of commercial auctions in next 15-20 days. We will be offering 138 mines.

What has been the development on the plan to transport coal via sea from east to west coast?

There is a definite development on that front. Ministries of power and coal have advised NTPC for the plants located on the western side and also the state gencos of Maharashtra, Gujarat and Punjab to float tenders and see if they are able to transport some quantity of coal from east to west through the coastal route. All of them floated tenders. NTPC has started transporting coal for their Dadri and Jhajjar plants. The coal will come from Paradip (in Odisha). The supplies will be brought to a port in Gujarat and from their it would be transported to Dadri and Jhajjar through the rail route.

We will have to look with a ‘nation-as-a-whole’ approach. The cost of imported coal is 10,000-12,000 per tonne. Cost of coal if transported through rail is 4,700, including the fare. The cost if you transport by the sea route is 7,400. So, its cheaper than the cost of import.

It is a little expensive than the cost by rail route, but since railway network is congested, if 5-10% of the supply shortage can be plugged by way of an extra cost that “nation as a whole" approach is better. So, we have to compare it with imported coal. Generators have not been mandated to use the sea route but they have been advised.

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Published: 23 Mar 2023, 11:15 PM IST
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