Last Updated on Oct 22, 2021 by Ayushi Mishra

The rising shipments of Coal India (CIL) to the power industry have begun to build up inventories at the power plant. This would alleviate a critical stock issue for power plants that rely on CIL’s supply. Increased supply has had an impact on the power sector, with average spot electricity prices falling to Rs. 3.76 per unit from Rs. 14 per unit a week earlier. Supplies to coal-fired power plants from CIL and other sources have now surpassed the stock requirement of 1.8 to 1.85 mn tonnes per day.

Supplies to the non-power sector, which were reduced in half for a day or two, have more or less resumed normality. Post this, South Eastern Coalfields (SECL) removed its notice of non-supplies to the non-power sector.

Now that CIL is steadily increasing supply, power generation companies are not forced to search for imports. Sourcing coal overseas with China, which produces half of the world’s coal, is already a big obstacle. With gas costs at an all-time high, Europe has begun importing coal from Indonesia, Russia, and America to satisfy winter demand, according to a coal ministry official.

According to an NTPC official, power plants avoid maintaining coal stock before and during the monsoon season since the quality of coal declines due to increasing oxidation. Furthermore, with unpredictably high power demand, keeping a low inventory was the new standard to save money, and rising distribution company dues forced power generation companies to cut back on their spending.

The power ministry has written to different state governments requesting that they pay CIL its outstanding debts. Despite this, according to an official, CIL has continued to supply through rail and road on a gradual basis. Total dues to CIL’s from the power industry are now estimated to be around Rs. 16,000 cr.

Ayushi Mishra
Inline Feedbacks
View all comments
Would love your thoughts, please comment.x