Coal India increases supply to address shortage in utilities

Coal-fired electricity accounts for over 70% of India’s electricity generation, with state-run Coal India Limited accounting for four-fifths of the total generation.

Government data shows that more than half of the 135 coal-fired power plants had less than a week’s stock of coal, 50 of which had less than three days. Data from the Central Electricity Authority shows that six plants had run out of coal.

“Coal India Limited (CIL) has continuously accelerated the supply of coal to 1.7 million tonnes per day for the last five days of August 2021,” the Coal Ministry said.

This is 4.3% higher than the July average of 1.63 million tonnes per day.

Coal shortages have been exacerbated by a massive increase in power demand in India, as states ease coronavirus-related restrictions, while hydroelectric power generation has declined.

Federal guidelines recommend that utilities have at least two weeks’ worth of coal stocks. At the beginning of the month, only the sixth thermal power plants had less than a week’s stock.

At the start of the financial year in April, Coal India and power plants across the country had record inventory levels.

India has been facing coal shortages from time to time, the last such shortage was in 2017.

While officials in the past have blamed each other and power producers for not buying enough coal, power producers say a lack of accountability plagues utilities.

“Coal shortage is a perennial problem as there is no accountability for short supply or non-availability of rakes,” Ashok Khurana, director general of the Association of Power Producers, told Reuters.

India’s federal ministry of coal and power has asked Coal India to prioritize supply to low-stock thermal power plants and divert fuel from mines with abundant inventory to address the shortfall.