Captive power users await govt assurance for regular coal supply

Impacted by inadequate coal supply, a number of captive power plants have tapered down their electricity generation and a few plants have also resorted to shutdowns, the association said on Tuesday while interacting with the media.

The Indian captive power producers association wants the government to earmark “at least 50 rakes per day for the non-regulated sector.
The Indian captive power producers association wants the government to earmark “at least 50 rakes per day for the non-regulated sector.

Industries which run captive power plants to generate electricity for their own factories have not yet received any assurance from the government regarding resumption of regular coal supply, the Indian captive power producers association said. Impacted by inadequate coal supply, a number of captive power plants have tapered down their electricity generation and a few plants have also resorted to shutdowns, the association said on Tuesday while interacting with the media.

As FE recently reported, the minerals industry had sought the intervention of the Prime Minister’s Office to ensure their operations were not disrupted due to coal shortage. In a letter addressed to the principal secretary to the Prime Minister, the Federation of Indian Mineral Industries had stated that Coal India’s (CIL) request to the Indian Railways for 296 rakes per day exclusively for the power sector could put the non-power coal users in an “immensely precarious situation”.  

People aware of the development told FE that fuel stocks with CIL is currently at 32 million tonnes (MT) and it is currently growing significantly in line with the seasonal trend of higher coal production and lower power demand during the winter months. Supply to the captive sector is seen to increase after coal stocks reach comfortable levels at power plants. CIL supply to captive plants have marginally increased to around 82 MT in April-November this year from 79 MT in the same period last year. However, while 19.5% of CIL’s overall coal supply had reached non-power sector in April-November this year, last year the share was more than 22%.

With rising production and economic activity, coal demand by the industries has increased after the lockdowns to contain the pandemic were lifted. With the government taking several steps to address the issue of coal shortage at numerous power plants across the country in September-October, other industries had been complaining about the brewing fuel crisis. 

The Indian captive power producers association wants the government to earmark “at least 50 rakes per day for the non-regulated sector. Analysts at India Ratings had pointed out earlier that high coal requirement by the power sector may leave the other sectors such as cement, aluminium and steel in lurch which would have to increase their dependence on imported coal. 

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