Coal India to refrain from conducting any e-auction till situation stabilises

By: |
October 15, 2021 1:32 PM

The development assumes significance as the supply of coal is being prioritised to the power sector to replenish the dwindling stock in the wake of reports of an electricity crisis looming large.

coal stockCIL's coal allocation under special forward e-auction for the power sector registered a rise of 8.4 per cent to 7.94 million tonnes (MT) in the April-August period of the ongoing fiscal.

Amid the low stock position at the electricity generating plants, state-owned CIL has asked its subsidiaries to refrain from conducting any further e-auction of coal, except special forward e-auction for the power sector, till the situation stabilises.

The development assumes significance as the supply of coal is being prioritised to the power sector to replenish the dwindling stock in the wake of reports of an electricity crisis looming large.

“In view of the current low stock position at the powerhouse end, supply of coal is being prioritised to the power sector to replenish the dwindling stock…coal companies are advised to refrain from conducting of any further e-auctions of coal with the exception of special forward e-auction for the power sector, till the situation stabilises,” Coal India said in a recent letter to its arms, including Eastern Coalfields Ltd (ECL), Bharat Coking Coal Ltd (BCCL), Central Coalfields Ltd (CCL).

In case, any coal company finds it necessary to liquidate any slow-moving stock through the e-auction route without affecting despatch to the power sector, the same may be communicated to Coal India along with proper justification before any such auction is planned, the letter said.

“This is only a temporary prioritisation, in the interest of the nation, to tide over the low coal stock situation at the stressed power plants and scale-up supplies to them. It does not mean stoppage of e-auction format,” Coal India said.

The company said it is augmenting its production and off-take steadily. Once the situation stabilises, expectedly within a short time, and stock at coal-fired plants attains comfort level, other sectors will be brought back to their regular supply norm, the public sector firm said.

Supplies to non-power sectors during the first half of FY22 at a little over 62 million tonnes (MT) posted 10 per cent growth over the same period last year and an 11 per cent rise compared to COVID-free April-September 2019.

Even since the demand for coal reached a higher pitch from the power sector from August, supplies to non-regulated sector (NRS) consumers was close to 18 MT during August-September, clocking a growth of 37 per cent compared to pandemic free August-September 2019. Owing to skyrocketing coal prices in international markets, all the consumers have been vying for domestic coal, hiking up the demand.

Instead of restricting coal intake, had the power utilities stocked up coal from October last year till February this year, as repeatedly requested by coal companies of CIL, stock position at the plants would have been better.

CIL’s coal allocation under special forward e-auction for the power sector registered a rise of 8.4 per cent to 7.94 million tonnes (MT) in the April-August period of the ongoing fiscal. The state-owned company had allocated 7.32 MT of dry fuel in the same period of the previous fiscal, according to the monthly summary by the coal ministry for the Cabinet.

However, in August, there was no coal allocation under the scheme. In August 2019-20, 0.62 MT coal was allocated to the power sector by the company, Coal India said.

Coal distribution through forward e-auction is aimed at providing access to coal for such consumers who wish to have an assured supply over a long period, say one year, through e-auction mode to plan their operation.

The purpose of the scheme is to provide equal opportunities to all intending coal consumers to purchase coal for their consumption through single window services as per requirement and at a price determined by themselves through the online bidding process.

Forward e-auction is aimed at facilitating all the consumers of coal across the country with wide-ranging choices for booking coal online, enabling them to buy the dry fuel through a simple, transparent and consumer-friendly system of marketing. CIL, one of the major coal suppliers to the power sector, accounts for over 80 per cent of domestic coal production.

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