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
guest
0 Comments
Inline Feedbacks
View all comments
55,00,000+ users trust Tickertape for Investment Analysis!
55,00,000+ users trust Tickertape for Investment Analysis!
55,00,000+ users trust Tickertape for Investment Analysis!
55,00,000+ users trust Tickertape for Investment Analysis!

The blog posts/articles on our platform are purely the author’s personal opinion and do not necessarily represent the views of Anchorage Technologies Private Limited (ATPL) or any of its associates. The content in these posts/articles is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, please consult a professional financial or tax advisor. The content on our platform may include opinions, analysis, or commentary, which are subject to change, without notice, based on market conditions or other factors. Further, the use of any third-party websites or services linked on the website is at the user's discretion and risk. ATPL is not responsible for the content, accuracy, or security of external sites. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL (in case of IAs) and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. The examples and/or securities quoted (if any) are for illustration only and are not recommendatory. Any reliance you place on such information is strictly at your own risk. In no event will ATPL be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.

By accessing this platform and its blog section, you acknowledge and agree to the Terms and Conditions of this website, Privacy Policy and Disclaimer.