Coal India exceeds its coal supply commitment to electricity plants

Coal India Limited (CIL), in a bid to minimise the shortage of dry fuel for thermal electricity generating plants, is supplying more coal than its commitment to them, pushing the non-power sector to brace for more challenging days.

On Thursday, a company told the media that as several states have been facing an unusual power outage, Coal India is forcing more fuel to power plants than its commitment of 1.65 million tonnes per day.

As of May 10, a total of 85 thermal power plants dependent on domestic coal have critical stock, while 11 such factories dependent on imported coal have a critical stock level. A total of eight power plants are not in function.

On average, CIL delivered 1.66 million tonnes of coal per day to power utilities in April, which rose to 1.73 million tonnes during the last week of the last month.

In this condition, the supply to non-power industries such as textiles, fertiliser, and aluminium gets affected.

Indian Coal Merchants' Association president V K Arora told the media that now, non-power industries are not getting coal despite making payments in e-auctions.

He said supply to non-power industries would be no more than 30% of the demand.

Moreover, the majority of the coal is presented by road, which in many circumstances is not feasible for offtake, Arora said.

Coal supply to non-power industries would be about 2.2 lakh tonnes per day to 2.5 lakh tonnes per day against an average of 3.5 lakh tonnes per day in February. The demand is evaluated to be 5 lakh tonnes per day.

Eastern Coalfields and Bharat Coking Coal merged were offering 9-10 rakes per day to non-power industries, but that too has been decreased to half in the last few days, Arora said.

As the country struggles with more increased demand for power during the summer, sharp spikes in imported fuel costs and freight rates are compounding the issue.

The Indian railways have cancelled several trains to prioritise coal rake movement across the nation to deal with the lack of the necessary input at thermal power plants.

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