Power plants’ regulated coal intake resulted in shortage at their end: CIL

Even as Coal India (CIL) is saddled with a pithead stock of 53 million tonne and has supplied 202 million tonne to the power sector between April 1 and August 29 this year — 27% and 8% more than the corresponding period in 2020 and 2019 respectively — shortage of coal in power plants aggregating generation of 90,000 MW has made the mining PSU jittery.

Despite overdues of Rs 17,000 crore from gencos generating 20,000 MW as of July, CIL has not stopped supplying coal to power plants, though supply is restricted to the minimum quantity required. State gencos of Maharashtra, Rajasthan, Madhya Pradesh and West Bengal have long pending overdues.

A CIL official told FE that many power plants, including those of NTPC, regulated their coal intake between November 2020 and June 2021 since they were producing less due to low demand for power. This created a stockpile of coal at their plant heads. After the demand for power started picking up, the power plants started replenishing their stock instead of creating a buffer and ultimately fell short on coal.

“We have been writing to the power gencos since October 2020 not to regulate and build up stock at their end so that generation does not suffer during the summer and monsoon of FY22. This didn’t elicit any response from their end,” a CIL executive said, adding that CEA has not held CIL responsible for this shortage.

The PMO has already taken cognisance of the matter and an inter-ministerial meeting between the coal and the power ministries is being held.

The CEA projected that the power sector required 1.31 MT daily in July, but the offtake from the power sector was 1.26 MT a day. Despite growth of 8% and 12% in power generation in the third and fourth quarters, respectively, in FY21, intake from power sector had been 118.7MT and 127.61 MT respectively, less by 12.72 MT and 19.67 MT, respectively, against the projected demand.

Coal stock at the power plants was 24 MT at the end of July, almost on a par with the previous five years’ average stock position.

“The stock could have been higher if there was no regulated intake. There are no hindrances in supplies on CIL’s end as it has a buffer stock, steady output and exposed seams, which keep it ready for supplies to meet any demand surge in power,” the CIL executive said.

Supply to the power sector from April 1 to August 29 this year was 202 MT, as against 159.6 MT during the same period last year and 187.8 MT in 2019. Supply to the power sector has been more than the pre-Covid period, with CIL itself holding the inventory for power plants. Most generation companies have not been indenting their monthly requirement despite repeated requests when the demand for power dipped, the executive said.