Deteriorating Coal Supply to Power Plants in India
The coal-fired power plants in India are facing acute shortage of coal with 47 of the 100 power plants monitored by Central Electricity Authority (CEA) are having coal stock of less than 7 days at the end of July’14. The power plants monitored by CEA are having only 7 days’ coal stock on an average in July’14-end as against 13 at the end of April’14. This may lead to sharp drop in coal-fired power generation if the supply scenario fails to improve. Such a high number was last seen in November’12. NTPC, the largest power producer in India has been the worst hit as 8 of its 23 power plants are reportedly having stocks of merely two days. The power shortage in India has reached such a situation that of the 142,647 MW of peak demand in June, only 137,352 MW was met leaving an unmet gap of 5,295 MW. The major reason for this low stock position is the lower than planned supply of thermal coal by Coal India Ltd (CIL) to the power producers. During Apr-Jun’14 CIL was able to supply only 88.7 Mt coal as against the Annual Action Plan (AAP) Target of 101.6 Mt with a materialization of 87%. The reasons behind such supply shortage are (a) Shortage of supplies during this period as was on account of intermittent law and order problems hampering coal transportation and despatch in Jharkhand and Orissa. (b) Less wagon supply against indents of coal companies particularly for TPPs of Western and Southern region. (c) Transportation constraints due to seizure of coal transportation trucks at the coalfields during the Lok Sabha elections. (d) In Mahanadi Coalfields Limited (MCL), coal transportation to Kanikar siding of Basundhara area is stopped during day time since last seven months and Siding No.3 & 4 of Talcher are disturbed and closed for despatches due to law and order problems affecting rake loading from these sidings. (e) Restriction of working hours from 10.30 AM to 3.30 PM imposed by State Government due to heat wave in MCL. Our analysis shows that low coal stock situation at power is a temporary phenomenon and cyclical in nature. However, this time the problem may persist for an extended period. The tight stock position has already entered the third month. Historically coal production and dispatch get affected during the rainy season. So coal supply is likely to remain subdued at least till September. Above that about 10 Mt of coal production by CIL is feared to be lost this year due to agitation by 122 employees who were terminated being accused of indiscipline. Although CIL has started production in the 12 Mtpa Amrapali open cast pit in Jharkhand, it’ll take time to reach its capacity. Hence India’s power crisis is likely to continue in next couple of months unless CIL is able to ramp up production and the rail-road transportation issues are sorted out.