From claims of surplus coal supplies about three months back, the country is now talking of a severe shortage of the fuel. Coal stocks at 107 coal-fired power plants are down to critical or super-critical levels, and there are fears of a dark festival season.
While the government is maintaining that it is unlike the situation in China, industry observers blame it on bad planning. According to the Union Power Ministry, the low coal stocks at power plants are primarily due to a spike in electricity demand on the back of economic revival.
Rains hit output
Also, the heavy rains in the peak production months of August and September impacted the production and dispatch of coal. The situation was compounded by a surge in imported coal prices that led to increased dependence on the domestic production.
The continuous rain in the coal mining areas the last to months affected despatches, the Power Ministry said, adding they have picked up since. On October 4, the total number of rakes despatched was 263 which is 15 more than the previous day’s. Despatches are expected to increase further, it said.
Union Power Minister RK Singh said the coal demand has increased and that the government was trying to meet it. The Coal Ministry is said to have raised the issue with Coal India Ltd.
Stocks with power plants
On October 3, the average stock of coal in power plants was for about four days. The Central Electricity Authority (CEA) website shows that of the 135 power stations, 17 plants, with a total capacity of 21,325 MW, have zero day stock; 20 (22,550 MW) have one day stock; 20 (29,960 MW) have two days stock and another 19 (22,000 MW) have three days stock left as on October 3. At the same time last year, only some 15 plants with total capacity of 18,192 MW were in critical/super-critical coal stock position (holding less than six days stock).
The demand for power has been increasing from August, when the electricity consumption was 124 Billion Unit (BU) against August 2019’s 106 BU (before the Covid). This is an increase of almost 20 per cent, according to the government.
Avoidable crisis
To manage coal stocks and ensure equitable distribution, the Power Ministry has constituted a Core Management Team, which is closely monitoring and managing the fuel on daily basis and ensuring follow-up action with Coal India and the Railways to improve supplies to power plants.
According to industry sources, the crisis could have been averted. A number of plants did not build up coal stocks before the monsoon. The non-payments of coal dues by States such as Maharashtra, Rajasthan, Tamil Nadu, Uttar Pradesh and Madhya Pradesh also resulted in inadequate supplies.
Coal India claims that it has ramped up supplies to thermal power plants by nearly 12 per cent annually. The state-owned miner had been requesting Gencos from October 2020 to shore up stocks, instead of regulating intake. Maintaining the CEA-prescribed 22-day normative stock rule could have averted the situation, too.
According to Ashok Kumar Khurana, Director-General, Association of Power Producers, advance preparation and ensuring sufficient stocks ahead of monsoons is a “well known strategy. The situation that we are witnessing August onwards raises obvious questions. If you see, thermal plants in previous months had not done very high level of generation and PLF. When needed there is a let down by fuel supplier necessitating costly imports.”