Centre takes steps to build up coal stocks

An inter-ministerial sub-group led by the coal ministry has been monitoring the situation twice a week. In order to manage the coal stocks and ensure equitable distribution, the power ministry earlier constituted a core management team (CMT).

The supply of coal and the power situation in the country are likely to improve soon, with steps being taken to ensure gradual buildup of coal stocks in the near future, people aware of the matter said on Saturday.

Global coal prices also increased by 40% and India’s imports fell to a two-year low.(HT file photo)

An inter-ministerial sub-group led by the coal ministry has been monitoring the situation twice a week. In order to manage the coal stocks and ensure equitable distribution, the power ministry earlier constituted a core management team (CMT). “The CMT is closely monitoring and managing the coal stocks on a daily basis and ensuring follow up actions with CIL, railways to improve the coal supply to power plants,” an official said on condition of anonymity.

On Saturday, the CMT held a meeting to review the latest situation. “It was noted that on October 7, total dispatch of coal by Coal India limited (CIL) touched 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 power sector to 1.6 MT per day in next three days and thereafter try to touch 1.7 MT per day. It is likely to help in gradual buildup of coal stocks at the power plant in near future. The coal supply as well as consequent power situation is likely to improve,” the official quoted above said.

There are four reasons for the depletion of coal stocks at the end of the power plants — sharp increase in demand of electricity due to the revival of the economy; heavy rainfall in coal mine areas during September; increase in prices of imported coal, causing more dependence on domestic coal; and non-building of adequate coal stocks before the onset of the monsoon. “There are also legacy issues of heavy dues of coal companies from certain states such as Maharashtra, Rajasthan, Tamil Nadu, UP, Rajasthan and Madhya Pradesh,” another official said.

With declining coal reserves sparking concerns of a power crisis in the country, the Centre has issued guidelines for optimum utilisation at stations generating electricity, a move that is aimed at ensuring that no “unutilised capacity remains idle” by relaxing some aspects of power purchase agreements.

“It has been brought to the notice of the Government that some power plants are not generating to their full capacity at any given time and the unutilised capacity remains idle as they are tied up under power purchase agreements. Whereas in the public interest, such power needs to be despatched, where there is a requirement in the grid by the other users or consumers,” the latest guidelines, issued by the Union power ministry on October 8, said. HT has seen a copy of the guidelines.

As the Indian economy picked up after the brutal second wave of Covid-19, demand for power rose steeply. Global coal prices also increased by 40% and India’s imports fell to a two-year low. The country is the world’s second largest importer of coal despite also being home to the fourth largest coal reserves in the world.

“Where the procurer does not requisition power from the power plant with which he has signed the Power Purchase Agreement (PPA), up to 24 hours in advance prior to 00.00 hrs of the day of delivery of power, the generator shall be free to sell the unrequisitioned power in the power exchange,” the guidelines said.