Govt to ration coal supply to power plants in April-June 2023 on railway rake shortfall

New Delhi

Beginning next month, Power Ministry will ration domestic coal supply to power plants in the April-June quarter due to a shortage of 21 million tonnes (mt) on account of limited availability of railway rakes.

The Ministry on Friday issued directions to all Gencos and independent power producers (IPPs) on fair distribution of coal from domestic stocks. The decision was taken at a meeting on preparations for the high demand period (April-May). The March 7 meeting was chaired by Power Minister RK Singh.

“As informed in the meeting, against the requirement of 222 mt of domestic coal in Q1 (April-June 2023), the likely availability from all sources (Coal India, Singareni Collieries Company and captive mines) will be around 201 mt only due to constraints in Railway logistics,” the order said.

It was decided that available domestic coal will be distributed amongst the Gencos (Central, State & IPPs) in a “fair and transparent manner”.

In January, the Power Ministry while issuing the order for blending with 6 per cent imported coal said that based on past trends the likely supply of coal in H1 FY24 would be around 392 mt and the anticipated shortfall is around 24 mt.

Coal distribution plan

As per the plan, domestic coal would be allocated in the ratio of fortnightly average generation by Gencos. Besides, coal required by pithead plants (through MGR/ Conveyor, other means) will be excluded since it does not use railway’s network. Similarly, plants taking coal through ‘road only’ mode and coal from captive mines will not be provided rakes.

“If States are found to be selling power generated from domestic coal at notified price in significant amounts in the power exchange, their rakes will be reduced accordingly. It is advised that surplus power may be made available to other Discoms through PushP Portal,” it added.

Rake shortage

On rake shortage, an official said “Railways only have some capacity constraints in evacuation of coal from only two locations, South Eastern Coalfields (SECL) and Mahanadi Coalfields (MCL). This is primarily due to change in distribution pattern from these coal companies with more coal required to be moved to long distance plants. Railways are evacuating as per demand from all other coal companies.”

Earlier this month, Power Ministry said that Railways agreed to provide 418 rakes a day and will enhance it in due course. Coal supply through rakes for the power sector in April-February FY23 stood at an average 408 rakes per day against 344 rakes a year-ago. In February, 426.3 rakes per day were loaded against 399 rakes last year.

Coal supply

The cumulative coal stocks at all power plants in the country as on March 22 is 34.37 million tonnes (MT), against a daily requirement of 2.78 MT. A total of 40 domestic coal based (DCB) power plants and seven imported coal based (ICB) plants have critical stocks.

Earlier this week, Coal Secretary A L Meena told businessline that as of March 20, overall stocks stood at 108 MT. By March 31, it is likely to go up to 115 MT, which includes 33 MT at power plants, 60 MT at mine pit heads and rest with washeries, good sheds and in-transit.

Power consumption

The Central Electricity Agency (CEA) expects India’s energy demand at 142 billion units (BU) in April 2023, highest for 2023, before tapering to 141.20 BU in May and 117 BU in November.

Power Ministry has projected a peak demand of 212 GW in March 2023. During FY24, peak demand is expected at 229 GW in the summer months. The average growth in energy requirement for FY24 is expected to be higher by 4.9 per cent compared to FY23.