Thursday, Aug 18, 2022

Coal India Limited Exceeds Commitment To Electricity Plants; Tough Time For Non-Power Sector

CIL supplied 1.66 million tonnes of coal per day to power utilities in April which increased to 1.73 million tonnes during the last week of the last month

India Coal AP Photo/Ajit Solanki

Coal India Limited, in a bid to minimise the shortage of dry fuel for thermal electricity generating plants, is supplying more coal than its commitment to them, forcing the non-power sector to brace for tougher days.

As a number of states have been facing an unprecedented power outage, Coal India is pushing more fuel to power plants than its commitment of 1.65 million tonnes per day, a company told PTI on Thursday.

A total of 85 thermal power plants dependent on domestic coal have critical stock as of May 10, while 11 such factories dependent on imported coal have a critical stock level. A total of eight power plants are not in operation.

On average, CIL supplied 1.66 million tonnes of coal per day to power utilities in April which increased to 1.73 million tonnes during the last week of the last month, the official said. 

In this situation, the supply to non-power industries such as aluminium, fertiliser and textiles gets affected.

“Now, non-power industries are not getting coal despite making payment in e-auctions, " Indian Coal Merchants' Association president V K Arora said.

Supply to non-power industries will be no more than 30 per cent of the demand, he said.

“Moreover, the majority of the coal is offered by road which in many cases is not feasible for offtake," Arora said.

Sources said that coal supply to non-power industries will be around 2.2 -2.5 lakh tonnes per day against an average of 3.5 lakh tonnes per day in February. The demand is estimated to be 5 lakh tonnes per day.

"Eastern Coalfields and Bharat Coking Coal combined were offering 9-10 rakes per day (to non-power industries) but that too has been reduced to half in the last few days," Arora said.

As the country struggles with higher demand for power during the summer, sharp spikes in imported fuel prices and freight rates are compounding the problem. 

The railways have cancelled several trains in order to prioritise coal rake movement across the country to deal with the shortage of the vital input at thermal power plants.

Non-power Industry associations had written to Prime Minister Narendra Modi in February on deteriorating coal supply to them stating that curtailment in fuel supply by rail as well as road and road cum rail (RcR) modes over the last few weeks has pushed the sector towards a "catastrophic" situation.

Moreover, the fertiliser being part of the regulated sector is also suffering immensely due to a supply crunch from the indigenous sources, they said in a joint representation.

The industry bodies included the Aluminium Association of India, Coal Consumers' Association of India, Confederation of Indian Textile Industry, Indian Captive Power Producers Association, Sponge Iron Manufacturers Association and Fertiliser Association of India.