1. Power plants leave no coal for others; cement, steel industries suffer

Power plants leave no coal for others; cement, steel industries suffer

Keeping in mind the low-stocks scenario, it was earlier decided by the government that Coal India Ltd (CIL) would load at least 250 rakes daily, out of which 215 rakes are supposed to be allotted to the power sector.

By: and | New Delhi | Published: October 19, 2017 5:48 AM
Out of the coal supply of 216 railway rakes per day in the first twelve days of this month, 206 went to power sector, leaving other users high and dry. (Reuters)

Given “critical” levels of coal stocks at power plants across the country and preferential supplies to them, other coal-dependent industries such as cement and steel are suffering. According to a coal ministry statement, out of the coal supply of 216 railway rakes per day in the first twelve days of this month, 206 went to power sector, leaving other users high and dry. Keeping in mind the low-stocks scenario, it was earlier decided by the government that Coal India Ltd (CIL) would load at least 250 rakes daily, out of which 215 rakes are supposed to be allotted to the power sector. This means that out of the 35 daily rakes earmarked for the non-power sector, it is currently receiving only about 10 rakes per day. Requirement of thermal-based power has suddenly gone up due to loss of around 4,000 MW from wind, nuclear and hydro plants, and the coal-based plants did not build up stocks during the period April-August. “CIL’s average production is 215, which means that everything that is moving by rail is going to power houses. But there is another segment comprising 25% of the total coal consumption. So coal supply to those sectors is getting impacted,” said a government official requesting not to be named. Coal contributes to more than 62% of total electricity generated in the country.

It is for this shortage of supply that CIL on October 13 in a letter to its subsidiary companies said to relax payment from non-power companies as they have not been getting coal for some time. “It (supply of 250 rakes by CIL) had to start from October 1, however given it was the Dussehra weekend, loading was in the range of 170 for the first three days. It did pick up in the next few days and has gone up to 236 at the peak level. The average is 225-230,” added the official. CIL has promised it will be able to come up to the level of 250 rakes barring festival holidays in the later part of October. Northern Coalfield Ltd, a CIL subsidiary, has asked railways to take 21 rakes to power plants situated far away from the coal mines in northern India. Similarly, Western Coalfields Ltd has dispatched 364 rakes in the first fifteen days of October, out of which, only six rakes went to the non-power sector.

Nevertheless, as on October 15, 20 power plants across the country, located far away from their allotted mines, were still with coal stock of less than four days. Only one such plant was in such a critical situation on the same day last year. This is excluding the plants with outstanding dues which were already supplied more than committed or did not lift coal offered to them. Total coal stock at power plants with coal linkage contracts with CIL had 20.4 MT of the fuel reserve on October 15, 2016. The figure dwindled to 7.4 MT on the same date this year. According to the official, with 215 rakes per day power houses may not come out of the critical or super critical zone but will have sufficient for regular production of power. “This level of production will need to be continued for the entire financial year for power houses to have comfortable fuel stock,” added the official.

Coal stocks at thermal power plants across the country started dropping to alarmingly low levels from August due to rains flooding a lot of mines and underground fire leading to the closure of the critical Dhanbad-Chanrapura railway line. After that, power plants situated within a radius of 50-60 km from CIL mines were allowed to lift coal through their own arrangement. Many power plants belonging to companies such as DVC, Maharashtra state generating company, NTPC and Lanco availed this option to keep their plants running. CIL produced 113.1 MT in the quarter ended September, and dispatched 103.2 MT to the power sector. Coal offtake by the power sector recorded a rise of nearly 15% in the July-September quarter. In September, the growth in coal supply to power plants was 21%, one of the highest in the history of the state-owned coal behemoth.

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