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As Centre prioritises thermal plant stocks, non-power sectors’ coal supply to stay low

Non-power sector consumers of coal such as aluminium, steel and cement producers have raised the issue of low coal supplies from Coal India Ltd (CIL) as a result of the Central government’s move to prioritise supply for thermal power plants since July.

Written by Karunjit Singh | New Delhi |
December 28, 2021 2:28:35 am
Many plants are now purchasing more expensive power from the grid and using a blend of more expensive imported coal to keep their plants running, according to industry sources.

Non-power sector consumers of coal are likely to face low supply of the dry fuel through January as the Centre is set to continue prioritising supply to the power sector. Non-power sector consumers of coal such as aluminium, steel and cement producers have raised the issue of low coal supplies from Coal India Ltd (CIL) as a result of the Central government’s move to prioritise supply for thermal power plants since July.

Aluminium, steel and cement producers that use domestic coal to power their plants have voiced concerns that low supplies to the sector are raising input costs and that in the case of aluminium producers, a loss of power for a duration as small as two hours would lead to prolonged shutdowns.

Many plants are now purchasing more expensive power from the grid and using a blend of more expensive imported coal to keep their plants running, according to industry sources.”We have issued revised coal stocking norms (for thermal power plants). We need to have 58 million tonnes (of coal stock) by the end of March. Gradually, things will improve and by the end of January it should improve (for non-coal consumers also),” said a government official who did not wish to be quoted.

The 180 thermal power plants monitored on a daily basis currently have a total of 23.3 million tonnes (MT) of coal stock against normative requirements of about 59.1 MT of coal. The official quoted above said that trends indicated that thermal power plants may not be able to accumulate normative stock levels by March 2022.

Low coal stocks at thermal power plants had forced many states including Uttar Pradesh, Rajasthan and Punjab to impose load shedding in October, as states rushed to power exchanges paying three-four times normal rates for power due to inadequate supply. The Centre has since revised stocking norms upwards to require thermal plants to maintain higher stocks between February and June prior to the monsoon period when coal stocks tend to fall.

Non-power sector consumers, who had witnessed a slight recovery in coal supply from CIL in November, have raised the issue that supplies to them have been curtailed again in December.

The Railway Board had instructed that coal supplies to thermal power plants (TPPs) be prioritised through December in a notice to all zonal railways. “In order to meet the coal demand so that stock is built up in TPPs, it has been decided to accord higher priority in loading of coal for Power Houses i.e. plants of Central/State Power utilities and IPPs) from Goods sheds for another period starting from 04.12.2021 to 31.12.2021,” said the Railway Board notice.

Experts noted that non-power coal consumers need about 45-50 rakes of coal per day and that the supply had fallen to only 27 rakes per day in October. Supply to the non-power sector increased to 33-34 rakes per day in November, but has since fallen again, according to industry sources.

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