Coal supplies to non-power sectors drop 29% in FY23 | The Financial Express

Coal supplies to non-power sectors drop 29% in FY23

June was an even worse month for NRS consumers, when supplies to them went down to 10.8 rakes per day against 41 rakes during June last year.

Coal supplies to non-power sectors drop 29% in FY23
Total rake despatches increased to an average of 288.5 a day during June this year against 262.8 rakes a day during the same month last year, according to coal ministry data.

Supply of power to the non-regulated sectors (NRS) has dipped 28.5% on year so far in the current financial year, despite the PSU miner, Coal India (CIL) achieving 24.3% increase in production and 10.6 % increase in offtake. While CIL’s total daily despatch of rakes during July this year has increased to 261 from 244.5 rakes during the same month last year, daily despatches of rakes to the NRS consumers decreased to 12.7 from 33.9 during the same month a year before.

June was an even worse month for NRS consumers, when supplies to them went down to 10.8 rakes per day against 41 rakes during June last year. Total rake despatches increased to an average of 288.5 a day during June this year against 262.8 rakes a day during the same month last year, according to coal ministry data.

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NRS consumers include aluminium, cement, sponge iron, paper, ceramics, tea, textile and captive power producers (CPPs). Supplies to the industries including CPPs were restricted to 75% of the annual contracted quantity (ACQ) for enhanced supplies to the power sector and daily despatches to the industries were limited to 0.2 million tonne, against a requirement of 0.5 million tonne a day.Supplies to the CPPs alone shrunk by 31.7% y-o-y so far, the coal ministry data shows.

According to sources in the industry, notwithstanding the Cabinet Committee of Economic Affairs’ guideline that the targeted allocation to the NRS consumer should be at least 25% of the total production, despatches of the NRS consumers have been 14% of the total despatches so far. As per the CCEA guidelines, the proportion of coal allocation between the power and the non power sectors should be kept at the same level as the average proportion in the last five years, i.e 75:25. But the actual supply ratio to the NRS has been much lower during the last six months. Under such a situation, the fertiliser industry has been suffering immensely. The tea industry, the country’s fourth largest exporter, is paying a hefty premium to the tune of Rs 18,000-20,000 per tonne to source coal.

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CPPs are either kept idle or industries linked to CPPs are forced to buy power from the market, leading to system inefficiency in the form of high A&TC losses and higher specific consumption of power while running at low capacities, the sources said. Continuous process plants are compelled to purchase from power exchanges, leading to increase in power demand and inflated exchange rates. This is resulting in lower availability of power for domestic consumption, making it impossible for state discoms to source power from exchanges at larger volumes and higher rates, 10 industry bodies including sectors like aluminium, sponge iron, tea, cement, paper, fertiliser, textile and other coal consumers, said in the joint representation made to the PMO.

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