Unprecedented increase in electricity demand due to revival of economy among reasons for depletion of coal stocks: Power Ministry

New Delhi [India], October 10 : After Delhi and Punjab Chief Ministers flagged the issue of shortage of coal at power plants, the Ministry of Power listed four reasons for the depletion of coal stocks including an unprecedented increase in demand for electricity due to the revival of the economy.
As per the release by the Ministry of Power, an inter-Ministerial sub-group led by the Ministry of Coal has been monitoring the coal stock situation twice a week.
"There are four reasons for the depletion of coal stocks at the power plant end- unprecedented increase in demand for electricity due to the revival of the economy; heavy rains in coal mine areas during September 2021 thereby adversely affecting the coal production as well as despatch of coal from mines; increase in prices of imported coal to unprecedented high level leading to a substantial reduction in power generation from imported coal-based power plants leading to more dependence on domestic coal; non-building of adequate coal stocks before the onset of Monsoon," read the release.
There are also legacy issues of heavy dues of coal companies from certain states viz., Maharashtra, Rajasthan, Tamil Nadu, UP, Rajasthan and Madhya Pradesh, the Power Ministry said.
In order to manage the coal stock and ensure equitable distribution of Coal, the Ministry of Power constituted a Core Management Team (CMT) on August 27, comprising of representatives from MOP, CEA, POSOCO, Railways and Coal India Limited (CIL) to ensure daily monitoring. The CMT is closely monitoring and managing the coal stocks on daily basis and ensuring follow up actions with CIL, Railways to improve the coal supply to power plants. CMT in its meeting held on October 9 reviewed the status.
"It was noted that on October 7, the total dispatch of coal by Coal India Limited (CIL) touch 1.501 MT thereby reducing the gap between consumption and actual supply. Ministry of Coal and CIL have assured that they are making best efforts to increase dispatch to the power sector to 1.6 MT per day in the next three days and thereafter try to touch 1.7 MT per day. It is likely to help in the gradual build-up of coal stocks at the power plant in near future. The coal supply, as well as the consequent power situation, is likely to improve," the release said.
The Power Ministry pointed out that a surge in the revival of the economy after the second wave of Covid led to an unprecedented increase in demand and consumption of electricity. "The daily consumption of electricity has crossed beyond 4 Billion units per day and 65 per cent to 70 per cent of the demand is being met by coal-fired power generation only, thereby increasing dependence on coal," it said.
"Power consumption for the period August-September has progressively increased from 106.6 BU per month in 2019 (normal non-covid year) to 124.2 BU per month in 2021. During this period the share of coal-based generation has also increased from 61.91 per cent in 2019 to 66.35 per cent in 2021. As a consequence, total coal consumption in the month of August-September, 2021 has increased by 18 per cent in comparison to the corresponding period in 2019," it added.
The Power Ministry said that imported coal price of Indonesian coal jumped from USD60/ton in March-2021 to USD160/ton (in September/October 2021) of 5000 GAR (Gross as received) coal.
"The import of coal has decreased in comparison to 2019-20 due to import substitution and rising prices of imported coal. The reduction of imported coal is compensated by the domestic coal for power generation, hence increasing the demand for domestic coal further. As compared to 2019, there has been a 43.6 per cent reduction in power generation from imported coal which led to extra demand of 17.4 MT of domestic coal during Apr-Sept,2021," read the release.
The Ministry of Power has issued guidelines on October 8 for operationalising optimum utilization of generating stations as per the requirements in the electricity grid. These guidelines will enable imported coal-based plants (having sufficient coal) to operate and ease out the burden on domestic coal.