Govt making efforts to meet gencos' coal demand, trying to raise supply to 2 MT per day: Coal Minister Pralhad Joshi

Union Coal Minister Pralhad Joshi on Tuesday said the government is making full efforts to meet the coal demand of power producers and stressed that steps are being taken to soon ramp up the dry-fuel supply to two million tonnes per day, from the current overall dispatch of 1.95 MT per day.

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"We at the ministry and Coal India Ltd (CIL) are making full efforts to meet the coal demand... Yesterday (Monday), we supplied around 1.95 million tonnes (MT) of coal. Around 1.6 million tonnes from CIL and the remaining from

Singareni Collieries Company Ltd. All put together, 1.95 MT we have supplied," the minister said.

The statement comes at a time when the country's power plants are grappling with fuel shortages.

"I think that in the history of India... This is the highest-ever supply we have made and I am assuring you that this supply will continue throughout," the minister said.

Joshi was speaking at the launch event of the third tranche of the auction for commercial mining of coal.

"From October 20-21 or before that, we will try to reach two million tonnes (supply), which will again be a record," he said.

The minister assured all stakeholders of the coal supply required for power generation.

"I assure all the stakeholders and even people of the country that whatever coal is needed for power generation, that coal will be provided from the coal ministry," he said.

The minister further said the coal supply will go up as the monsoon recedes.

"As of now...At Coal India, we have around 22 days' stock and as you all know the monsoon is receding now and our supply will further go up," he said.

The minister also hinted that for another 30-40 years, coal definitely has got a future.

"This is an opportune time for auction of the third tranche of coal blocks. In the entire world and at some places in India, there are discussions taking place on what is the future of coal.

"On the one hand, they question us about the future of coal. Now, there has been little shortages of coal, this is being discussed not only in India but in the entire world," he said.

Coal Secretary A K Jain also said this is an appropriate time for the launch of the third round of auction for commercial coal mining, as there are talks currently in the country about the supply of fossil fuel and there is also demand for coal.

He said that given the three-four times hike in the imported coal prices, if India is importing a large amount of fuel at this rate, the electricity bills would have shot by two-three times.

CIL had earlier said it is marshalling all its efforts to bridge the demand-supply gap to the extent possible.

With 40 million tonnes stock at its pitheads and increasing, the availability of coal will not be a problem, the company had said.

The total offtake has gone up to 1.73 MT per day during October (till Sunday), posting a 10 per cent jump over the same period last year.

CIL Director (Marketing) S N Tiwary had said, "The aim is to ramp up supplies to the power sector even higher which we hope to achieve after Puja. Once the despatch rate is maintained, the stock build-up will help tide over the tight situation."

Despite heavy rainfall, CIL produced about 126 MT of coal during the second quarter of the current financial year, setting a record high for the second quarter, posting a 9.6 per cent year-on-year growth.

During the first 10 days of October, CIL's output has logged 6.5 per cent growth over last October.

Going forward, the production will increase further when the attendance at coalfields improves after festival holidays.

CIL's supplies to power generation companies (gencos) have been at an all-time high till now this fiscal but it is the never-experienced-before hunger for the dry fuel, spurred by an unmatched increase in power generation that upset the demand-supply scales.

Once October and major festivals are over, conditions will improve and the power demand is expected to be down by a notch, easing the pressure, it said.

During the first half of the current fiscal, loading to the power sector at 225.3 rakes per day was up 28 per cent compared with 176.3 rakes of last year same period.

"The company is building up adequate evacuation logistics to transport coal," it had said.

The major pain point for CIL has been 14 imported coal-based power plants scaling down their generation due to skyrocketing coal prices in the international markets.

Domestic coal-based thermal power plants had to step in to fill in the generation shortfall, which in turn placed an un-factored load of around 10 MT on CIL. Had this not happened, the stocks at power plants would have been around 17-18 MT instead of the bleak seven MT now.

During September, the generation from these plants at 2.041 MW fell short by 75 per cent against the target of 8.114 MW. The generation logged negative growth of 72 per cent compared to September 2020, when they generated 7.238 MW. Progressive up to September, the contraction in the generation was 30 per cent over the same period a year ago.

CIL accounts for over 80 per cent of the domestic coal output.