Coal India Limited to increase coal supplies to meet rising demands

01 Oct 2021

Coal India Ltd (CIL) has announced that it will increase coal supplies to utilities to address coal shortages across the country's power plants, leading to fuel shortages at a time when electricity demand is rising.

From October onwards, deliveries to coal-fired plants will be capped at 1.5 million tonnes per day, rising to 1.6 million tonnes in due time.

Over a month ago, the Ministry of Power warned of a coal shortage caused by rising electricity demand and convened emergency meetings with stakeholders to address the issue, but the coal deficit has grown rather than shrunk.

Power demand in the country increased 13.2% in the first eight months of 2021, after falling for the first time in more than three decades in 2020.

Higher power demand has resulted in a rally in the shares of Indian power producers such as NTPC Ltd, Tata Power, and Torrent Power.

On September 27, 112 of the 135 coal-fired power plants had stocks that would last less than a week, compared to over 70 plants a month earlier.

According to CEA data, over 70 plants had stocks for less than three days on September 27.

Despite the fact that Coal India's supplies to power plants have surpassed pre-Covid levels, Indian utilities are experiencing a coal shortage.

From April 1 to September 28, Coal India delivered about 243 mt of coal to utilities, a 24% increase over the same period last year and an 11% increase over April-September 2019.

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Also read: CIL launches Spectral Enhancement (SPE) to ease coal supply process

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