Coal stock situation to improve as power sector gets weather breather

The panic over the coal stock situation at the country's power utilities is likely to abate as the demand would reduce due to season change. The ministries of coal, power and railways plan to beef up coal supply this month to gear up for high demand later next month when cold in the northern region will start peaking. However, the rake allotment is still a sore point among power and non-power customers of the Railways.

“This month should give us a buffer to prepare ourselves. The three ministries are in regular discussion to prepare a plan for robust coal supply to power sector when the demand increases December onwards,” said a senior official in the ministry of power. As in summers, power demand in winter months also peaks due to the requirement for heating and agricultural purposes.  

At the same time, railway officials said the coal demand from the power sector had considerably declined over the past two months. “While the demand suddenly increased by 18 per cent in the month of August, it gradually declined by 2.9 per cent and even further in September and October,” a Railway official stated. Out of the total 1,050 rakes, around 400 goes to the coal sector, while the rest is shared between key sectors including iron ore, cement and fertilisers.

There is, however, still discord between the power and railways ministries over the number of rakes being allocated to power units. While the Railways have maintained that they are giving stipulated rakes for the power sector, a power ministry official said their demand was not being met.

According to the railway ministry, the number of rakes for Coal India (CIL) has improved to 235 per day in November, compared to 223 in October and around 213 the months before that. “We are giving high priority to the power sector. As per the contract, we are supposed to give 217 rakes per day to the power sector and that is being maintained,” said a railway official.

Officials in the power ministry said the power units across the country are receiving 210 rakes. He further said the coal supply is not enough to build stock at these units. “Most of the power units are functioning on a day to day supply. There is not enough supply to build or maintain a stock for more than 1-3 days,” said an official not wishing to get named.

As per the latest data from Central Electricity Authority, an average number of days of coal stock at power units stands at 6 days as on November 9, 2017.

Meanwhile, other sectors such as steel, cement and captive power producers have complained of rake diversion to power units from their share.

Railway ministry officials state that the reduction in coal supply to other industries is mainly to do with Coal India’s capability to improve total loading. Out of the 235 rakes per day that Railways is providing, it is upon CIL to prioritise the consumers. As per the initial agreement with CIL, Railways was supposed to provide 250 rakes per day. In the recent meetings with officials, minister Piyush Goyal has directed both the ministries to work towards this target.

Regarding the allegation about a possible diversion of more number of rakes to power plants in poll-bound Gujarat, railways maintained that it is providing rakes to various states as per contract. “We are providing about nine to ten rakes to Gujarat as per the contract. Not just Gujarat, many states in India have power plants with critical coal stocks. We are committed to supplying them as per contract,” he said.

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