While states and thermal power plants have been crying for coal shortage, the Centre has repeatedly said there is enough stock of coal with the country. But is it really the shortage of coal that is behind the blackout fear? No, the government data suggests. Since July, the country has been producing more coal than the set target, as per the Union Coal Ministry data accessed by CNN-News18.
In September this year, the coal production and coal despatch were more than that in the same month in 2019 or 2020. The overall coal production last month was 51.70 Million Tonne (MT) – at least 31 per cent more when compared to the production of 39.48 MT in September 2019 or 38.90 MT in September 2020.
Similarly, the overall coal despatch has been 59.80 MT in September as compared to 54.63 MT and 44.36 MT in September 2020 and September 2019, respectively.
Up to last month, Coal India Limited (CIL) produced 249.82 MT of coal, which is 37.29 per cent of its annual production target of 670 MT. As per the Union Coal Ministry, the rainy season has badly affected the coal production and despatch between June and September. It added that the CIL will ramp up the production from October onward to achieve the annual production target and meet the rise in demand.
It is also interesting to note that on August 2, the Union Coal Ministry informed the Rajya Sabha that the coal stock at CIL was 55.31 MT and coal stock at the thermal power plants was 23.83 MT — sufficient for just 13 days.
Significant hike in power consumption
After the second wave of coronavirus, the revival of the economy led to unprecedented increase in demand and consumption of electricity.
In the August-September period, the power consumption has increased from 106.6 billion units (BU) per month in 2019 to 124.2 BU per month in 2021. Further, during the period, the share of coal-based generation has also increased — 61.91 percent in 2019 to 66.35 percent in 2021.
As per the official data, the total coal consumption in the last two months was 18 per cent more in comparison to corresponding period in 2019.
The daily power consumption has crossed four BU per day and about 70 per cent of this demand is being met by coal fired power generation only. All these factors have increased the dependence on coal.
During the first three quarters of 2020, there had been a drop in coal demand. The momentum of growth of coal demand began in the last quarter of 2020-21 and continued in the first quarter of the current fiscal year.
In this financial year’s first quarter, the domestic despatch reached 195.2 MT, higher than 144.7 MT attained in the first quarter of 2020-21 or 185.1 MT attained in the first quarter of 2019-20.
2020-21 reported drop in coal demand, production
As the country was fighting the coronavirus pandemic, there was a decline in coal demand last year, the Coal Ministry data shows. During 2020-21, demand for coal was 905.88 MT as compared to 955.72 MT in 2019-20 – a decline of over 5 per cent.
This has not just impacted the domestic coal despatch but also the import. While the domestic coal despatch contracted by 2.3 per cent, the imports contracted by 13 per cent in 2020-21 when compared to the previous financial year. In 2020-21, all India coal production was 716.084 MT.
September 2021 reported increase in power generation over past years
Coal-based power generation during the last month was at least 13 per cent more in comparison to September 2019. The overall power generation during the last month was about 10 per cent higher than the power generated in September 2020.
Also, during the last month, the coal-based power generation was 75,691 MU – about 12 per cent drop from 85,736 MU in August. This was due to heavy rainfall in September
Other reasons for depletion of coal stocks at power plants:
Along with heavy rains and higher power demands, the global price of coal is also impacting the thermal power plants. As there had been an increase in prices of imported coal to unprecedented high levels, the plants dependent on imported coal are now switching to domestic coal. Further, the plants have not stored adequate coal stocks before the onset of monsoon.
The cost of imported Indonesian coal increased to $160/ton in September-October from $60/ton in March. This has resulted in a drop in the import of coal in comparison to previous years. This drop is being compensated by domestic coal for power generation. This too has increased the demand for domestic coal. This year between April and September, there has been a drop of 43.6 per cent in power generation from imported coal which led to extra demand of 17.4 MT of domestic coal when compared to 2019.
Railways to rescue again?
Be it helping thousands of migrants to reach home amid the initial days of the coronavirus pandemic or helping the country with oxygen supply in the second wave, the railways have always come to the rescue whenever the country is in crisis.
This time also, the Railways has extended a helping hand. From increasing the number of coal rakes loaded per day to enhancing the amount of coal moved, the Indian Railways is all set to deal with the surge in the demand further.
In September, the loading of the Indian Railways was 106 million tonnes, which includes 47.74 million tonnes of coal. This will be increasing this month.
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