Coal Stocks Critical At A Third Of Power Plants Even As Demand Is Set To Spike

The total stock of domestic and imported coal was half of the normative requirement as of March 5.
<div class="paragraphs"><p>(Source: Unsplash)</p></div>
(Source: Unsplash)

The coal stock at about a third of India’s power plants has fallen below the critical level even as heatwaves are expected to worsen after temperatures beat a 120-year record in February.

Of the 180 coal-based power plants in the country, 47 that source fuel locally and nine that rely on imports have less than 25% of the normative stock—considered a critical position. Seven plants are not in operation and five are based on washery rejects.

In anticipation of higher peak temperature in the summer and to avoid a repeat of last year’s power shortage, the Indian government has invoked Section 11 of the Electricity Act, making it compulsory to operate plants from March 16 till June by importing coal. The weather department has forecast above-normal temperatures till May, after record February heat.

The Central Electricity Authority has mandated a coal stock of 17 days for pit-head plants and 26 days for non-pit head plants between February and June every year. If this level is breached, the coal stock is considered critical.

India has an installed power capacity of 2,04,436 MW, with daily coal requirement of 2,781 tonnes. The total stock of domestic and imported coal stood at 33,892 tonnes as of March 5, according to the CEA. That's just 50% of the normative requirement of the country.

India has an installed power capacity of 27,500 MW on imported coal but the bulk of that was lying idle because of higher cost of fuel. Some of the major plants under this category include 4,000 MW power projects each of Adani Power Ltd. and Tata Power Ltd. in Mundra, Gujarat; and Essar Power Ltd.’s 1,200 MW Salaya power plant in Gujarat.

The all-India thermal plant load factor level is expected to improve from 58.9% in FY22 to 64% in FY23 and further to 65.5% in FY24, led by healthy demand growth and limited thermal capacity addition, ICRA Ltd. said in a note. The full-year growth for FY23 is estimated at 9.5-10%. It's likely to moderate in FY24, but remain healthy at 5.5-6%.

However, the modest coal stock position remains an area of concern for the sector, the rating agency said. While the coal stock at power plants improved gradually to 12 days, as on Feb. 28, ICRA said it remains half of the normative level of around 24 days.


Vikas Srivastava has close to 20 years of experience in...more
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