With comfortable coal stocks, no power crisis this festive season

India is unlikely to see a repeat of the 2021 energy crisis this festive season as coal-fired power stations across the country have comfortable levels of fuel stock to meet the electricity demand of the world's fastest expanding major economy.

Learning lessons from the October 2021 energy crisis, when power stations were put on outage alert, due to coal stocks falling to the lowest level in years, the ministries of coal and power as well as railways this year have worked out a plan to ensure adequate fuel stocks at electricity generating units, officials said.

With coal used to produce almost 70 per cent of electricity, officials are confident that the 2021 crisis will not be repeated this festive season that kicks in a week's time.

Also Read | Coal rush! Energy crisis fires global hunt for polluting fuel

Electricity demand in India has soared with a rebound in industrial activity after the easing of pandemic-related curbs. And the increased lightning needs during the festive season is likely to send the demanding shooting.

According to a coal ministry official, the coal stocks at power plants are at a "comfortable" level as of now. The coal position in states like Haryana, and Punjab which last year faced problems of coal shortages at their plants, have comfortable levels of dry fuel at their units.

"The government is holding regular review meetings twice a week with coal companies to firm up strategies for enhancing both coal production and offtake," the official said.

Moreover, the coal ministry is also coordinating with Railways for rakes for a smooth supply of coal to the power sector.

Also Read — EU chief proposes crisis measures to curb rise in energy prices

Depleted coal stocks last year led to spot power rates surging and supplies of the fuel being diverted away from key customers including aluminium smelters and steel mills. Electricity demand had surged 16 per cent during the festive season last year.

Late rains, however, have added to the challenge this year.

In May this year, several states suffered prolonged blackouts as scorching heat waves boosted energy demand at a time when coal stockpiles were low.

That sent the officials to the drawing board to rework a coal supply plan to avert future crises. Coal-fired power plants were ordered to use imported fuel to operate at full capacity. Stock norms were also revised.

The revised norms mandated the coal stock of 17 days at pit head stations and 26 days at non-pit head stations to be maintained by power plants from February to June every year.

Also Read | India's coal output remains below estimate at 58 MT in August

According to the official as on September 11, the coal stock at domestic coal-based power plants is at 25 million tonnes, while on September 11, 2021, the coal stock at domestic power plants was just 11 million tonnes.

According to the advisory body Central Electricity Authority (CEA) on September 18, the actual coal stock at power plants in the state of Punjab is 382 thousand tonnes, while the normative stock required is 486.6 thousand tonnes.

The normative coal stock at power plants in Rajasthan is 1,985 thousand tonnes and the actual stock is 634 thousand tonnes.

In Chhattisgarh, the normative coal stock required is 700 thousand tonnes and the actual stock is 344 thousand tonnes.

According to ICRA Vice-President and Sector Head Ritabrata Ghosh, thermal coal import volumes have grown at an estimated 26-27 per cent Y-o-Y in the April-August period of FY'23.

Thermal coal imports averaged at 15 million tonne per month in April-May, and in June-July, despite the imported coal prices being much more expensive than domestic coal, the average monthly thermal coal import run-rate spiked to 20.5 MT per month as thermal power generators were mandated to blend 10 per cent imported coal and non-regulated users faced challenges in getting access to coal supplies from domestic sources.

However, seeing a reversal in import trends is being seen now, with August imports declining sequentially over July. From here on, as the domestic coal production picks up post-monsoons, the supply tightness is expected to somewhat improve for the remaining part of the current financial year.

According to Debasis Mishra, partner at Deloitte Touche Tohmatsu, unlike last year, there might not be a situation of critical levels of coal stocks in power plants by end of September as the demand is stabilising and moderating and secondly there is a robust production and dispatch that state-owned Coal India and captive miners have achieved during monsoon months.

Credit also goes to railways as well for deploying 400 plus rakes on a daily basis to ease the transportation, he explained.

Coal India's former Chairman Partha S Bhattacharya is of the view that the coal production and supply to power plants this year is much more comfortable than it was the same last year. "I don't anticipate a crisis situation coming up in the festival session," he explained.

A total of 180 thermal power plants, including non-pithead plants, being monitored, having a capacity of 204 GW, have total coal stock of 26,781 thousand tonnes against the normative level of 51,395 thousand tonnes.

The daily requirement of coal for these plants is 2,778 thousand tonnes. The coal stock available at these plants is for almost 10 days, according to CEA data.

As of September 15, 2021, of the 136 plants, having a capacity of 168 GW have a daily requirement of 1,825 thousand tonnes. The total coal stock at the plants is 11,167 thousand tonnes which is a total coal stock of six days.

The daily requirement of coal of the non-pit head plants having a capacity of 132.68 GW is 1,385 thousand tonnes. The total coal stock available at 8,040 thousand tonnes against the daily requirement is 1,385 thousand tonnes. The total coal stock available is for six days.