Coal shortage shuts 8,580 MW generation capacity

By: |
New Delhi | Published: August 23, 2018 3:50:20 AM

As much as 8,580 MW of coal-based power generation capacity is under outage due to shortage of fuel across the country.

coal, coal sector, coal industry, power, power sector, power industryAccording to a recent report by CRISIL, consumption of non-coking coal is expected to clock a compound annual growth rate (CAGR) of about 5.4% to 1,076 MT in FY23 from 826 MT in FY18, on the back of a 6.5% CAGR in coal-based power generation.

As much as 8,580 MW of coal-based power generation capacity is under outage due to shortage of fuel across the country.

According to the latest report of the Central Electricity Authority’s (CEA) operation performance monitoring division, 1,740 MW capacity was offline in West Bengal, followed by 1,700 MW in Gujarat and 1,640 MW in Andhra Pradesh as on August 16.

The situation arises even as production by Coal India and Singareni Collieries Company – the two state-owned commercial coal producers of the country – increased by 12.7% year-on-year to 196.4 MT in the April-July period.

These two companies have even increased their dispatch to consumers by 10.4% to 223 MT, but still 14 power plants have coal stock for less than seven days, underscoring the infrastructure inadequacy to ferry the fuel in the wake of rising electricity demand.

Thermal power plants produced 359 billion units (BU) of electricity in the aforementioned period, registering a growth of 5.4%. Since power cannot be stored, generation levels indicate the change in demand patterns.

Power minister RK Singh had said the coal shortage is expected to remain for about three years with rise in power demand. NTPC has called tenders for importing 2.5 MT of coal for its power plants. The company’s board has approved up to 5 MT of imports in FY19. NTPC had imported 0.32 MT of coal in FY18 and 1.03 MT in FY17. The development comes at a time when global coal prices are on the rise. Indonesian coal now costs around $49/MT, up about 35% annually.

As FE recently reported, Adani Power has shut down a unit at the Kawai plant, even as it was one of the 10 electricity generation stations to receive assurance on coal supply under the scheme to harness and allocate koyla transparently in India (Shakti scheme), which was specifically designed to salvage power plants with power purchase agreements but without fuel supply agreements.

According to a recent report by CRISIL, consumption of non-coking coal is expected to clock a compound annual growth rate (CAGR) of about 5.4% to 1,076 MT in FY23 from 826 MT in FY18, on the back of a 6.5% CAGR in coal-based power generation.

However, the agency believes that improvement in coal production and transportation facilities would lower the share of coal imports for power consumption to 13.4% in FY23 from 19.6% in FY18.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition