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Wednesday, December 08, 2021

Coal shortage easing at plants, power price falls on exchange

Market price of power traded on the India Energy Exchange Day Ahead Market fell to Rs 2.4 per unit (kilowatt hour) on Friday from a peak of Rs 16.4 per unit on October 11.

Written by Karunjit Singh | New Delhi |
November 7, 2021 3:43:43 am
IEX, coal shortage, Coal production, IEX DAM, India Energy Exchange Day Ahead MarketThe average coal inventory across the nation’s thermal power plants has improved to seven days worth of stock from an average of four days in the first half of October, when a number of states including Punjab, Uttar Pradesh and Rajasthan imposed load shedding as thermal plants ran out of the dry fuel. (Representational File)

The average market price of power traded on the India Energy Exchange Day Ahead Market (IEX DAM) fell to Rs 2.4 per unit (kilowatt hour) on Friday from a peak of Rs 16.4 per unit on October 11, with states rushing to the exchange to buy power as thermal power plants struggled to meet demand due to low coal stocks.

The average coal inventory across the nation’s thermal power plants has improved to seven days worth of stock from an average of four days in the first half of October, when a number of states including Punjab, Uttar Pradesh and Rajasthan imposed load shedding as thermal plants ran out of the dry fuel.

Thermal power plants are required to maintain minimum reserves of 15-30 days of coal stock based on the distance of the plant from the source of coal.

The total volume of power sold on the IEX DAM has also fallen to 1,47,308 MWh (megawatt hour), from a peak of 2,81,823 MWh on October 12.

A number of states were forced to buy power from the exchange at prices of Rs 20 per unit during the coal shortage.

A sharp uptick in power demand with the economy recovering from the Covid-19 pandemic, coupled with above average rainfall in September impacting coal production and supply, had contributed to a drawdown in coal stocks.

Low coal stocks led to an outage in thermal power plants with a capacity of 11 GW (gigawatt) on October 12.

A surge in international coal prices had also forced a number of thermal power plants that utilise imported coal to stop power generation.


Large dues form power generation companies (gencos) to Coal India have also played a role in lower coal inventories with supply being cut to plants with large unpaid dues. Gencos have dues of about Rs 16,000 crore owed to Coal India, according to the Power Ministry.

Coal and lignite-based thermal power plants account for about 54 per cent of India’s installed power generation capacity and about 70 per cent of current power generation.

China’s daily coal output at new yearly high

Beijing: China has boosted daily output of coal to a new annual high of 11.88 million tonnes after concerted efforts to alleviate a supply shortage as it heads into winter, the powerful state planner said, and production could rise further.

The Asian giant’s consumption of polluting coal has drawn scrutiny this week as nations gathered in Glasgow to discuss further measures needed to slow global warming. Beijing, by far the world’s biggest consumer of coal and also the top producer of climate-warming greenhouse gases, is committed to reducing coal use, but only after 2025.  REUTERS

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