Stretched supply chains likely to weigh on coal stocks till Apr-end

Plants that rely on domestic coal have come under pressure as those utilising imported coal have reduced power supply to discoms amid high international prices.

“States such as Punjab, Haryana, Gujarat, and Maharashtra that had PPAs with them (imported coal based plants) are now demanding more coal for their own thermal plants,” the official said.

States have increasingly been looking to procure power from the energy exchanges at elevated rates to avoid load shedding. The average market clearing price of electricity on the Day Ahead Market at the India Energy Exchange was Rs 9.74 per unit (kilowatt-hour) on Friday, up from an average price of Rs 3.4 per unit in January. The government is currently in talks with such thermal power plants and discoms to restart power generation to meet demand. “I do expect the situation to remain grim for the next 15 days or so,” said the official on the ability of states to meet their power requirements, noting that lower demand for power in some areas in May could ease the pressure on coal supplies. The official said the move by the Centre to permit states to utilise linkage coal in plants closer to mines that can then transmit electricity, thereby reducing the need to transport coal, would be key to dealing with the issue of power supplies.

Despite increasing demand for power, the number of railway rakes being used to transport coal to powerhouses saw a decline in the first half of April. An average of 380.6 rakes of coal were transported to thermal power stations in the first two weeks of April as against an average of 408.9 rakes in March, according to data from the Indian Railways. Officials said the change could be a result of increasing shipments of coal to industry and more shipments to locations far from mines, which require higher turnaround time.