Coal India is looking to ramp up production by over eight per cent to 220-225 million tonne (mt) in Q4 FY22during the fourth quarter of this fiscal, as against a production of 203 mt in the same period last year. The increased production will help bolster coal stock at power plants to over 45 mt by March 2022.

The total coal stock at power plants has improved to 22.2 mt as on December 14 against a total stock of 7.37 mt as on October 14 this year, as per the Central Electricity Authority website. Recently, the shortage of coal at thermal plants had triggered fear of massive power outages.

According to a senior company official, a major portion of this (22.2 mt) has come from Coal India and the company is focused on lifting this to 25 mt by December-end. CIL also has pithead stock of close to 31 mt.

The intent is to maintain steady supply of coal to power plants during summer and monsoon to avoid a disproportionate demand-despatch scenario, and reduce coal imports in the substitutable category.

Indigenous coal

At a recent workshop, Anil Kumar Jain, Coal Secretary, underscored the importance of shoring up coal stocks at power plants with indigenous coal.

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“Coal India, under the guidance of the Ministry of Coal, has drawn up plans to boost coal stock at thermal power plants to over 45 mt by the end of the ongoing fiscal, from its own sources. Coal India is aiming for the highest ever closing stock at power plants,” he said.

The 45 mt target is based on a projection arrived at by considering average coal-fired power generation of the previous five years from December to March and increasing it by seven per cent. The volume of coal required to meet this generation and additional stock build up was then worked out.

Outstanding dues

Although outstanding dues of coal sale from State and central power gencos came down by November end, they are still substantial, especially from State generators. This creates liquidity crunch in some of Coal India’s subsidiaries which require large capex push, the company said.

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However, Coal India’s despatches to coal based power plants rose by 62.6 mt to 340 mt during April-November 2021, from 277.4 mt for the comparable period last year. Even when measured against pre-pandemic April-November 2019, growth in power generation from Coal India’s coal has been 16 per cent.

Coal stock at a number of thermal power plants was critically low with 107 stations having only three days’ stock left as on October 3. The low stock was mainly attributed to the sudden spike in electricity demand on the back of a revival in economy. Heavy rains during the peak production months of August-September also impacted output and despatch of coal. This apart, non-payment of coal dues from States also resulted in inadequate supplies.