Govt banks on coal to power nation in summer; peak demand may cross 265 Gw

The heat is already on for India’s power grid and its managers to plan for optimum supply, as the summer inches closer with gloomy projections of extreme heat wave and record electricity demand. The government is expecting a major share of the load to fall on coal-based power to meet demand and is boosting coal supply at all ends.

Senior officials said the coal requirement submitted by the power ministry is 875 million tonnes (MT) for the current financial year, and the coal ministry has agreed to it. This translates into national miner Coal India Ltd (CIL) supplying this amount of coal for the period. The peak power demand is expected to touch or even cross 265 gigawatt (Gw) during the summer months.
 

Speaking with Business Stand­ard, Amrit Lal Meena, secretary, Ministry of Coal, said the coal co­m­p­a­nies were geared up to supply the required amount. “We are confident of producing the required coal capacity. We have also eased several logistical issues to improve coal availability at the level of thermal units,” Meena said.
 

The ministry has introduced mechanised coal loading facilities at close to 40 locations of all the seven production firms under CIL. From around 10-15 per cent of coal loaded through mechanised facilities, it is expected to go up to 33-35 per cent this year. “This will red­u­ce rake loading time to 45 mi­­n­­utes from three hours and im­pr­ove the turnarou­nd time of coal-carrying rakes,” said an official.

 

Sector experts are of the view that the share of renewable energy will rise only minimally. Coupled with it is the late arrival of hydropower this year as snowing was delayed in the northern region. “Electricity demand is expected to grow by 5.5-6 per cent in FY25 and the peak demand is expected to increase from 243 Gw in FY24 to 255-260 Gw in FY25. While the share of renewable, including large hydro, is likely to increase from 23 per cent in FY24 to 24-25 per cent in FY25, coal would remain as a major source of power supply and is expected to account for 73-74 per cent of the electricity generation in FY25,” said Girishkumar Kadam, senior vice-president and group head - corporate ratings, ICRA Limited.
 

Anticipating high power demand, the Ministry of Power recently directed all the power producers to continue importing 6 per cent of their coal requirements until June. In a recent note, the power minister underscored that domestic coal availability would not be enough to meet the required demand. “The status of power supply has been reviewed by the ministry and as per the projections, the peak demand is likely to reach up to 250 Gw in summer season (April-June 2024). It has been further observed that despite the increase in loading of domestic coal rakes, the supplies of domestic coal will remain constrained due to various logistical issues associated with the railway network,” the recent directive said.
 

The Ministry of Coal is, howe­ver, confident that there will be sufficient domestic coal. “We will have nearly 150 million tonnes (mt) of stock by March 2024, including 45 mt in thermal plants,” Coal Minister Pral­had Joshi said last week. The curre­nt stock at thermal power plan­ts stands at 46.8 mt, which translates into 16 days of coal stock.
 

Kadam highlighted that coal supply from domestic sources met 93 per cent of the requirement for power plants in India in FY23, with imports constituting the balance. He said that it would be replicated this year. “The dep­endence on coal imports is likely to remain in a similar range of 7-7.5 per cent in FY24. The government continued the mandate directing domestic coal-based power plants to import and blend coal till June 2024. In this context, ICRA expects imports to constitute 6 per cent of the coal consumption by power plants in FY25,” he said.