Rising Domestic Supplies

Sources said over 90% of coal produced by Coal India mines were diverted to power plants in the last couple of weeks following the fuel crisis. Coal India has about nine mining companies in India and of them Mahanadi Coalfields (MCL) in Odisha is the largest. Mahanadi Coalfields despatched a record 5.56 lakh tonnes of coal on October 22, loading 99 rakes of coal (each rake with about 59 wagons) —59 from Talcher Coalfields and 40 from IB Valley in Orissa. Mahanadi Coalfields had produced 4.98 lakh tonnes of coal on October 17 and loaded 103 rakes despatching 5.47 lakh tonnes of coal on October 17. Coal India had also deployed four-kilometre long rack trains with four engines on war footing to counter supply issues. The company normally produces about 13-14 lakh tonnes of coal during the rainy season and 19-19.5 lakh tonnes in other seasons. ‘’Around 60% of Coal India’s annual production happens in the second half of the year, though 53% of the annual volume is consumed in the first half. Coal India’s off-take during H1FY22 has seen a two-year CAGR of 6%, while production has seen only a two-year CAGR of 2%,” according to the Emkay analysts.

There are multiple reasons for the coal crisis, sources added. Global coal prices have surged significantly due to supply issues in China (due to increased safety inspections and mine closures), heavy rains in Indonesia and South Africa, and higher gas prices. South African coal prices increased from $70 to $200 between January and October. As a result, generation at imported coal plants in India was impacted and the supply of power under PPAs by import-based plants was down by 30% in the first half of the year.

Domestic coal-based plants generated 24% additional power, whereas production from imported coal dependent plants have gone down to minus 30%, coal secretary Anil Kumar Jain said at a mining conclave in Ranchi on Monday.

Coal Prices

10% power plants still vulnerable to coal shortage