91 million tonnes coal stock can meet power needs for 45 days

Coal India Ltd has 61 million tonnes of stock available in addition to 30 million tonnes with power plants and washeries, which is enough to run power plants for 45 days, officials told ET, saying the situation was critical but not alarming. Many power projects are operating with critical inventories, and a few have even shut down, raising alarm as the country faces a hotter-than-usual summer and record demand.

Union power and renewable energy minister RK Singh said Thursday, "We are capable of handling any rise in power demand," adding that a rise in demand is an indicator of a healthy economy.

Power stations have 25 million tonnes while sheds and washeries have another 5 million, taking the total availability as of now to 91 million tonnes. This is enough to run power stations for over 45 days even if consumption by the thermal units is pegged at the highest level of 1.9 million tonnes per day last October, officials said. Getting this coal to utilities will be crucial to ensuring power availability, said a senior government official.

Global coal prices have surged to a record of about $200 a tonne, accentuating the situation, as many plants running on imported fuel have stopped generation, forcing domestic coal-based ones to step up. The 16 GW imported coal plants in coastal areas are either shut or are operating at 20-30% capacity.

An added concern is that high consumption now may make it difficult to build stocks for the monsoon months when coal production is low.

The coal and power ministries had agreed to build stocks of 45 million tonnes by March-end in preparation for the summer and monsoon months but that's been frustrated by a significant increase in coal consumption by power plants. Last August, the country's power stations faced a coal crunch as over 80% of capacity operated with coal stocks at critical level.

Data available with Coal India showed that in the last week of March, against daily coal production of 2.6-2.7 million tonnes on average, the offtake was only 2 million tonnes per day.

Coal India targeted 1.9 million tonnes of production a day in April. The daily offtake target has been set at 2 million tonnes in the current month against 2.1 million tonnes for March. Officials also indicated a production mismatch at Coal India mines.

“You can’t have inventory mountains at a mine where logistics are saturated,” an official said. Shortage of explosives at certain Coal India mines has also impacted production, due to which allocated rakes are underutilised.

While Indian Railways is operating at the highest capacity, officials in various departments said the coal stock position at thermal power plants can improve if an additional 25-30 rakes per day become available for despatch.

Data available with the Central Electricity Authority (CEA) showed normative coal stocks at power stations depleted from 39% in the last week of February to 37% on April 5.

Industry insiders are also not comfortable with the power ministry’s new stocking norms. These mandate plants should hold coal stocks assuming they operate at 85% at all times, while the average utilisation of Indian coal plants is 56-57%.