Coal stocks at power plants depleting on demand surge

Coal stocks at power plants fell by over 6 million tonnes since July end as peak power demand rose exponentially through August amid deficient rainfall and sultry weather. Coal stocks at power plants stood at 28.9 million tonnes as on Friday against 35.2 million tonnes on July 31, as per data from the national power portal.

"There are concerns with regards to the current level of coal stocks, but it is not an alarming situation," a government official told ET.

The government on Friday asked power generation companies to import 4% of their coal requirement till March 2024. Power units were in January asked to import 6% of their coal requirement till September end.

The country recorded its highest-yet peak power demand met at 240 GW on September 1.

In the first four months of the financial year, coal stocks at power plants had depleted by 1.8 mt to 35.2 million tonnes as on July 31, which, as per government officials, was a comfortable level.

The second quarter of the financial year usually sees lower coal supply because of difficulty in production and evacuation of the fuel in monsoon. Consumption, too, normally reduces amid rains and cooler weather.

However, this August, coal consumption exceeded expectations, led by irrigation, cooling appliances, and lower wind power generation, government officials said.

Grid India, the demand and supply management cell of the power ministry, expects demand to remain elevated throughout the financial year.

In August, the domestic coal shortage at power plants was 200,000 tonnes per day, which was partly made up by imports, the power ministry said in a notification. If not for the import, coal stocks would have reached critical levels, it added.

The domestic coal requirement in October-March is estimated at around 404 million tonnes, but because of the insufficient number of railway rakes, only 397 million tonnes will be dispatched, the ministry said.

There has been a high gap between receipt of domestic coal and consumption at plants. Despite a year-on-year increase in domestic coal supply in the first quarter, the requirement could not be met, as per the ministry.

Two government officials said though railway rakes supply were higher this year, they have not been up to the required levels because of logistical constraints.

However, a railway ministry spokesperson told ET there was no shortage of rakes in supply. "Rakes are being supplied regularly as per the demand. In fact, the domestic coal loading for April to August 2023-24 has been increased by about 11 mt over the same period last year," he said.