Coal India's priority is to ensure power plants are well-stocked with Coal: CMD

Coal India has asked its staff to increase their efforts in order to exceed the 700 million tonnes production and offtake target for FY23, stating that providing adequate fuel supply to thermal power plants is a "priority."

In a letter to Coal India Limited (CIL) staff, chairman-cum-managing director Pramod Agrawal (CMD) stated that the company's priority is to ensure that the electricity producing facilities are properly stocked with domestic fuel despite the continued power crisis.

"Coal India's priority  is to ensure that the country's power plants are well-stocked with domestic coal and that the country receives power at a reasonable price. The goal should be to secure energy at the lowest possible cost "Agrawal stated and requested that the employees treat the targets as "sacrosanct".

"Allow no room for complacency. Taking inspiration from FY22's performance, let us build on it in FY23 to exceed the 700 MT output and offtake targets "said the CMD.

He stated that the country looks to Coal India to meet its energy demands. "It then becomes not only our responsibility, but also a business commitment to live up to that high standard," he continued. Every year brings new problems and obstacles, Agrawal said, and he advised his team to be ready for them.

"There is no way to avoid the issue," he stated. During FY22, the company's shipments to the power sector reached an all-time high of 540.4 MT, representing a 95.4 MT volume increase over the previous year.

"The increase in one year is greater than the cumulative growth of 91.2 MT accomplished over the previous seven years," the CMD stated. CIL's overall offtake reached a new high of 662 MT in FY22, representing a 15.3 percent increase over FY21. The FY22 supply increased by 13.7% and 9%, respectively, compared to the pandemic-free fiscals of 2019-20 and 2018-19.The annual increase of 87.4 MT in FY22 exceeds the cumulative rise of 85.1 MT during the previous six years.

Coal Secretary A K Jain previously stated that the existing power crisis is primarily due to a dramatic fall in energy generation from various fuel sources, rather than a lack of local coal. Jain credited the low coal stocks at power plants to a number of causes, including increasing power demand as a result of the post-COVID-19 economic boom, the early start of summer, rising gas and imported coal prices, and a dramatic drop in energy supply by coastal thermal power plants.

"It's not a coal problem; it's a demand-supply imbalance in the electricity sector... "As the economy has recovered, summers have arrived early, and the price of gas and imported coal has risen substantially," Jain explained.

He went on to say that the country's gas-based power output, which has dropped dramatically, has exacerbated the issue."Some of India's thermal power plants were developed along the coast," he further added.

"Some of India's thermal power plants were built along the shore to allow for the use of imported coal from neighbouring countries such as Indonesia... However, due to a steep increase in the price of imported coal, they have cut back on imports "Jain has stated previously.

Because of the huge spike in the price of imported coal, coastal thermal power plants are now only producing around half of their capacity. As a result, there is a disconnect between electrical demand and supply.

The secretary went on to say that states in the south and west were completely dependent on imported coal. When domestic coal is sent to domestic coal-based plants in these states through wagons/rakes to compensate for the loss of imported coal generation, rake turnaround time exceeds 10 days, causing rake availability concerns for other plants.

Since last year, the railways have loaded more coal than ever before, even if this meant reducing rake delivery to other industries to meet the increased demand in the power sector. In March, there was a lot of rake loading.

CIL provided almost 18 per cent  more coal to the power sector last year, with a fuel stock of 100 million tonnes.