Coal stocks at power plants down by 35pct YoY

Wednesday, 04 Jan 2012

Business Standard reported that delays in commissioning of new mines and a historic dip in production from operational mines have thrown coal availability position and the associated power capacity into emergency mode.

Fresh data from the Central Electricity Authority, the apex power sector planning body, reveals the current fuel stock at India’s 89 thermal power stations is down by 35% from a year earlier.

The power stations are running on an 8.3 million tonne coal stock, against 12.7 million tonne in the same period last year. In addition, 26 power stations have supercritical stocks, or stocks that can support operations for four days, up from 14 stations. Also, half of the 89 stations have stocks sufficient to sustain operations for seven days.

A senior coal ministry official said that “The main reasons for the decreased availability of coal recently are logistical problems of railway rakes and the hit to production from strike at Coal India Ltd and heavy rains.”

He said the ministry had taken several steps, including cancellation of captive blocks and taking up the rake availability issue with the Railways.

The ministry has awarded 193 captive coal blocks, largely to private sector companies, over the past 18 years. However, only 28 have started operations, throwing production targets off the track. These blocks were expected to produce 104 million tonne coal a year by the end of this Plan period. But last year, production stood at a dismal 34 million tonne. The ministry, therefore, has cancelled allocations of a dozen blocks, including five blocks of state-run NTPC Ltd.

The power ministry is also worried over the widening gap between the power capacity linked to CIL supply and actual receipts from the coal producer. CIL’s production remained flat at 431 million tonne last year. During this year, too, it has been reporting declines in production for the first time in recent history. The power ministry has urged CIL to meet its supply commitments in the absence of which over 24,000 MW new power capacity is likely to be stranded.

The ministry stated in a recent note that “Inadequate availability of domestic coal and reluctance of coal companies to sign fuel supply agreements have serious repercussions on the confidence of utilities, developers and investors.”

(Sourced from BS)