Skewed coal stocks to hit power availability and prices

Coal supply across the country is in a dire state with the average stock of six days at power plants. This includes close to 70 power plants with less than three days of coal.

In 2016, the average coal stock was close to 28 days during peak demand months. Coal deficit, coupled with low hydro and wind power generation this season, has pushed up the power prices in the spot market and is likely to remain on the higher side during winters. Hydropower is less by 6 per cent over the past year and wind by 40 per cent.

The current power price in the spot market is hovering around Rs 5.5 per unit. In September, the price went as high as Rs 9 per unit, given a sudden spurt in demand from various states. The increased price is also a major jump from the prevailing price of Rs 2-3 per unit that pushed the Centre to launch a mega drive towards short-term power market.

Executives pointed out that states, which are not signing long-term agreements are relying on short-term market. However, coal supply crunch and less hydropower this year have put stress on volume and prices in the spot market.

Industry data revealed that close to 11,000 megawatts (Mw) of coal-based power plants are under outage due to less coal supply. Out of this, the western region has the highest 5,000 MW of plants under outage. Most of these units blend imported coal, but as domestic supply improved in the first half of the current year, imports were reduced. Coal shipments at major Indian ports fell by 14 per cent till August 2017, from a year earlier, to 9.3 million tonnes.

These units are now grappling with low-domestic coal supply as transportation of coal is facing challenges. Against a cumulative normative demand of 1.37 million tonnes of coal per day from power units, the total despatch was of 1.22 million tonnes.

Government officials said the ministry of coal is trying to tackle the supply deficit with various means. “The coal ministry has increased the amount of coal to be transported through road and has urged Coal India to use all means to increase the supply,” said the official.

He said, as the power demand is reported to have increased by more than 2 per cent in September over August, Coal India is expected to match the corresponding increase in coal demand.

Private power developers have been crying foul over a low number of rakes being allotted to them for coal supply. The private companies in their representation to the government alleged that Coal India has reduced the coal supply through fewer rakes for private players and more for NTPC and state-run gencos.

Recently, Uttar Pradesh also wrote to the Centre citing the paucity of coal at its state-owned and privately run power units.

“The independent power producers (IPPs) and the state generating stations in the state are still not getting sufficient quantity of coal to generate power according to their full capacity,” said the letter sent by UP Power Minister Shrikant Sharma to the union ministry of coal. The letter also questioned the criteria for listing critical power units, and hence supplying them more coal.

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