As the country’s peak power demand is expected to increase this fiscal, state-owned Coal India (CIL) is hopeful of increasing supplies to the power sector by 4% year-on-year to 610 million tonne to meet the demand for coal-fired plants.
The 610-MT target is 23.4 MT more or 4% higher than the record ever 586.6 MT that CIL supplied to power plants in FY23, the coal miner said in a stock exchange filing on Wednesday.
The company’s apportioned quantity accounts for a little over 74% of the estimated coal requirement of domestic coal-based plants during the year, which is 821 MT. In the wake of forecast that a hot summer may push up coal demand, the company is gearing itself to meet the requirement on the back of adequate coal stocks at its pitheads and increased production in the first quarter of FY24.
“With increasing production and adequate coal stock of 69 MTs at our pitheads we aim to meet the projected target with our best shot and satiate the demand,” said a senior executive of the company.
“With large tracts of overburden already removed, exposing the coal seam, ramping up production should not be a problem,” the executive added.
CIL’s production and off-take for this fiscal is targeted at 780 MT. With 610 MT out of this expected to meet the power sector’s demand, the availability of coal for the non-regulated sector (NRS) increases sizeably.
Even after compensating for any unforeseen demand surge from the thermal power plants, coal accessibility to NRS would be much better in FY24 than a year ago. Coal India’s supply to NRS in FY23 was 108 MT.
According to the company, the domestic coal available in the system as of April 1, 2023 was around 125 MT, the highest, barring the Covid year of 2019-20, when the demand plummeted. This includes 69.6 MT at CIL’s pitheads, 34.6 MT at thermal power plants, 13.7 MT at goods sheds, washeries, captive mines and ports put together, around 3 MT in transit and 4.5 MT at Singareni Collieries.
Domestic coal-based electricity generation in FY23 witnessed a 10% y-o-y growth where the bulk of supplies, to the tune of around 80%, were through Coal India sources.
“We do not foresee a situation where the power generation will be interrupted for want of coal,” the executive added.
CIL’s supplies to the power sector hit an all-time high of 586.6 MTs ending FY23, topping the target of 565 MTs by 21.6 MTs. The increase in volume terms over the last fiscal was 46.2 MTs.
Notably, according to CareEdge Ratings, after growing at 6.4% in FY23, the peak power demand is expected to increase by 6% in FY24. “While the base deficit may remain near 0.5% for FY24, the peak deficit is expected to remain elevated,” the rating agency said in a recent note on thermal power. After spiking at 4% in FY23, CareEdge Ratings predicts it will be above 1% in FY24.
Coal/lignite-fired thermal plants saw a reduction in plant load factor (PLF) during the Covid-19 lockdown periods, but have rebounded. “PLF is estimated to be 63.8% in FY23 and 64.8% in FY24,” it said in the note.