Extended summer: High power demand behind thin coal stocks

Power generation in the country during April-June was 22 per cent higher than in the same period last year. This was also when there were several reports of coal stocks with power plants close to critical levels.

Executives in the power generation industry said the controversy over coal stocks needs to be understood. "This situation is always hand to mouth. This year, due to extended summer and less rainfall in north India, there has been high demand for power in the region, for which the stations were required to generate more power and to be run at high plant load factor. Due to this, whatever stock was received got consumed and this hampered build-up at the stations," said an NTPC official.

According to a Central Electricity Authority report, against domestic coal receipts of 405 million tonnes, total consumption by power plants was 457 mt (including imports) in 2012-13. Currently, against the daily requirement of 1.54 million tonnes of coal, the indigenous stock is 8.28 mt, enough to fire plants for six days across the country.

"The demand from thermal power plants is always higher than the supply. A coal stock of seven days is usual. It's during days of contingency that the situation gets worrisome," said the executive. This was, for example, when the temperature in August was a record high at 37 degrees Celsius in Delhi. The volume of power demand doubled from the usual 180 million units a day and spot prices reached a five-year high of Rs 10 a unit. The peak demand deficit across the country was 4.3 per cent against three per cent last year in the same month.

One of the executives quoted above said they were not staring at a blackout. When the temperature cooled, demand went down from major states such as UP, Bihar and Haryana in the first week of September. Spot power prices went down to a three-year low.

Even so, 13,000 Mw of power generation capacity is shut owing to shortage of coal. August saw reports from the northern and western grids on a power shortage and apprehension of a blackout. NTPC, the country's largest thermal power producer, has units in six power plants totalling 2,500 Mw shut across the country due to coal shortage.

"Some cases of low coal production is in our knowledge due to rains/flooding in the mining areas. Transportation is a major issue as some power projects are located far away from the mine area and have to depend on the railway network, which is heavily burdened and congested. All these factors led to a crisis-like situation, despite CIL trying its best to meet the requirement," said a senior executive of NTPC.

To augment supply for the power sector, Coal India has cut the e-auction amount to half, to around 25 mt, and diverted the amount to power plants.

HAND TO MOUTH

• 1,585,000 TONNES
  a day is the current coal demand
   
• 8,983,000 TONNES
  a day is current stock position
•  
• 52 THERMAL POWER PLANTS
  have critical stock for less than seven days (as on September 18)
   
• 32 THERMAL POWER PLANTS
  have critical stock for less than four days (as on September 18)
   
• RS 4.46 A UNIT
  is average market clearing price of power in spot market
   
• RS 7 A UNIT
  is average market clearing price of power in spot market in August

Source: CEA