Ample coal stocks for power plants; no blackout risk, says govt

States continue to flock spot market, prices at record high

With several states and power distribution companies (discoms) pressing the panic button on coal supply and shortfall in electricity, the Ministry of Coal and Power has rushed in to scotch any rumours of a blackout or power cuts.

Close to 16 Gw of coal-based power generation capacity is under outage (not generating) for lack of coal supply, according to the data on the National Power Portal.

An increase in international prices of coal and natural gas has added to the woes of power consumers.

The Union Ministry of Coal in a public statement said ample coal was available in the country to meet the demand of the power plants. “Any fear of disruption in power supply is entirely misplaced,’’ the ministry said. Coal Minister Pralhad Joshi told news agency ANI: “Reviewed coal production & supply situation in the country. Assuring everyone that there is absolutely no threat of disruption in power supply. There is sufficient coal stock of 43 million tonnes with @CoalIndiaHQ equivalent to 24 days coal demand.”

Government officials maintained the gas supply was being maintained since there was enough gas available. Gas consumption in the power sector has almost doubled to 25 million standard cubic metres a day (mmscmd) from 16 mmscmd earlier over the past few weeks to meet the challenges of power generation since coal was in short supply.

Gas-based power generators, however, usually rely on ad hoc purchases since they do not sign long-term contracts for regassified LNG.

Coal stocks at thermal units have been critical since August. Currently, 16.8 Gw of power generation capacity has no coal stock, and 29 Gw has less than three days of coal.

The coal ministry, however, said the coal available at the power plants “is a rolling stock which gets replenished by the supplies from the coal companies on a daily basis”.

The ministry said due to high international prices of coal, the supply of power from imported coal-based power plants reduced by almost 30 per cent while domestic coal-based power supply had gone up nearly 24 per cent in the first half of this year.

The power ministry in a statement said despite heavy rain in August and September, a “steep hike in power demand due to economic recovery and increase in prices of imported coal, domestic coal supply have sustained the operation of power plants and all-out efforts are being made to ensure full power supply to the discoms as per their requirements”.

Union Power Minister R K Singh said in a tweet: “I've warned Tata Power CEO of action if they send baseless SMSs to customers that can create panic. Messages by GAIL and Tata Power qualify as acts of irresponsible behaviour.”

NTPC and DVC have been directed to give full availability. Singh said GAIL India had been advised to make gas available from all sources, whether domestic-regulated or imported, to power plants in Delhi.

NTPC has been advised to offer a normative declared capacity to the Delhi discoms in accordance with their allocations from gas-based power plants under their respective power-purchase agreements. If any discom is found to resort to power cuts despite being power available in accordance with the PPA, it will face action.

With a delayed and scattered monsoon, coal production was affected at CIL’s mines from July onwards. As several states defaulted on their payments during the peak summer months, CIL regulated the coal supply to its thermal power units. This included high-demand states, such as Uttar Pradesh, Maharashtra, Tamil Nadu, and Rajasthan.

These states continue to face coal-supply problems. Maharashtra has the highest 2.9 Gw of capacity under outage, followed closely by UP with 2.4 Gw and Rajasthan with 2.3 Gw.

Imported coal-based power plants have reduced power generation since the cost of coal in the international market has inched up. As imported coal prices increased more than 40 per cent, imports to India were down to almost nil.

Gujarat, which has imported-coal run units, has 3.5 Gw shut due to “fuel shortage”, indicated the data on the National Power Portal.

However, with the shortage looming, several discoms are resorting to panic buying on the power spot market, taking spot prices to a record high of Rs 20 per unit (kWh), the ceiling price in the day-ahead market.

On Sunday afternoon, the average market clearing price (MCP) at the India Energy Exchange stood at Rs 16.42 per unit. There were purchase bids of 499,788 MWh against sell bids of 273,848 MWh, indicating a shortfall in supply. The market clearing volume (amount of power trades) also increased to 265,410 MWh on Saturday as against 245,313 MWh on October 1.