Coal India Ready To Meet Dry Fuel Demand From Power Sector

Amid early onset of summer and a pick-up in industrial demand for electricity, state-owned CIL on Tuesday said it is geared up to meet the demand of dry fuel from the power sector. The public sector coal producer also expressed hope to supply 156 million tonnes of coal to the power sector during April-June quarter of FY24. This would be 25.6 per cent of the enhanced annual dispatch target of 610 million tonnes (MT) slated for the sector in 2023-24.

"Coal India Limited (CIL) is optimistic about supplying 156 million tonnes of coal to power sector during April-June '23 quarter amid concerns over spike in coal demand," the coal behemoth said. CIL, which accounts for over 80 per cent of domestic coal output, is a major supplier of dry fuel to the electricity generating plants.

Factors in favour of CIL are a strong 68 MT coal stock build-up expected at its pitheads by the end of current fiscal, which as of Monday was 57.3 MT. Also, the maharatna firm will scale up its production into a higher orbit maintaining the pace on the back of an unprecedented 700 MT output, which it is on course to achieve by the end of FY23.

"Even after despatching the planned coal to power utilities in the first quarter of FY24, CIL is likely have a healthy 50 MT coal stock at its pitheads by June'23 end," said a senior official of the company in a statement. The state-owned coal mining behemoth is confident of meeting the enhanced 610 million tonnes (MT) coal supply target to power sector in 2023-24. The target is 20 MT more than the initially projected 590 MT requirement by power sector.

Of the total 821 MT domestic coal demand projected for the power sector in 2023- 24, CIL's target alone accounts for nearly three-quarters at 610 MTs. By the end of the ongoing financial year it is estimated that there would be at least 115 MT of domestic coal available to the power plants, with 68 MT at CIL's pitheads and 32 MT at plants' end.

Coal lying at private washeries, goods sheds, ports and captive mines account for around 12 MT. Rakes on run, that is coal in transit, normally make up 3 MT of coal.  Compared to last year's 92.7 MT, from the same sources, coal availability in the system would be 22.3 MT more.

"Even in the current financial year the initial target of 565 MT, to thermal plants, was increased to 569.5 MT by the power sector in May 2022. Taking the rejigged target into its stride, CIL as of 13 March '23, had already clocked 554 MT supply to power sector," the company said.

The company is well on its track to close FY23 with more than 585 MT despatch to power sector which represents an 8.3 per cent jump over 540 MT of FY22. "We are fully cognizant of the importance of meeting the demand surge from power sector and would do everything within our means to meet it," said the executive.

The power ministry had earlier directed all thermal plants using imported coal to operate with full capacity from March 16 to June 15 so as to avoid electricity shortage. The direction under Section 11 of the Electricity Act came amid rising power demand due to higher-than-normal temperature in several parts of the country. This order will remain valid for generation and supply of power from March 16, 2023 to June 15, 2023, stated a notice sent to 15 thermal plants that use imported coal.