Coal India Limited (CIL) is gearing up to scale up its supply to the non-power sector as the state-run company has managed to create “sufficient buffer stock”, providing these sectors with much relief after they have struggled with shortage of the fuel.
CIL is currently supplying around 3.4 lakh ton coal per day to non-power sector (NPS), which has been the average supply to this segment. Now, CIL has over 37 million ton (MT) of coal at its pitheads and therefore, it is considering increasing supply to consumers other than power companies, the miner said in a statement on February 12.
Industry bodies representing fertiliser, aluminium, textile, sponge iron and captive power producers, among others, had reportedly made a representation to the prime minister seeking relief from the coal shortage they were facing. CIL said that despite prioritization of coal supply to the power sector and facing other challenges, the company supplied 101.7 MT till January in FY22, which accounts for 97% of the same period last year’s quantity to non-power sector customers.
“CIL has sufficient buffer stock to increase supply to the non-power sector. Coal availability is not a problem,” said a senior executive at Coal India.
CIL’s dispatch to non-power sector in April-January in FY22 stood at 101.7 MT, up 8.2 percent in corresponding period of a pre-pandemic period in FY20. In FY19, when CIL recorded the highest ever total coal despatch since its inception, supply to the non-power sector grew by 11 percent over 91.5 MT.
In April-January of FY21, coal despatch to non-power sector was 105 MT, higher by a little over 3 MT compared to the same period of FY22. “The reasons for increased despatch during the Covid ravaged year were several. As the power sector regulated coal intake for the major part of FY21, due to demand disruption caused by Covid, CIL scaled up supplies to the non-power sector segment. Further, NPS customers also opted to lift higher volumes of coal as CIL’s e-auction sales were capped at notified price for the first half of FY21,” Coal India said.
Typically, non-power sectors import around 170 MT of coal for blending with domestic coal. But in FY22, the spiraling international coal prices proved to be a hindrance for importing requisite quantities giving rise to scarcity of coal at their end.
“FY22 has witnessed an unprecedented surge in power generation, the growth rate being the highest in a decade, necessitating the need to meet the power sector’s coal demand on a national priority. Riding on robust economic recovery, total coal-based power generation till January 2022 of the fiscal in progress grew by 11.2% on year-on-year comparison. Whereas domestic coal-based generation was up by 17% during this period. Bulk of the coal supply to the power sector was met by CIL on priority,” CIL said.
Coal India said that in the same ten months ended January 2022, power generation by 14 imported coal-based power plants had declined 48 percent. “Meeting the resultant generation gap fell on domestic coal-based generators requiring enhanced indigenous coal supply. CIL supplied to the tune of around 20 MTs of this additional demand. In other words, imports were curtailed to that extent,” said CIL.