To avoid 2022 crisis, Indian Railways ferries more coal for electricity

Imported thermal coal freight also sees higher volumes amid railways plan to avert 2022 crisis

As Indian Railways looks to avert the crisis like last summer, preparations are under way to stock up coal at thermal power plants. Much like February and March, thermal coal movement in April was 5 per cent higher than the previous year, data from the Ministry of Railways shows.

While India prepares for a hot summer this year, 48.23 million tonnes (mt) of coal for thermal power plants was ferried by Indian Railways in April.

The national transporter also moved about 500,000 tonnes--18.4 per cent-- more imported coal for power plants this April than it had done last year. The originating freight volumes from Southern and Western Railway zones saw a growth of 121 per cent and 40 per cent, respectively.

Thermal and industrial imported coal movement through railways grew 15.7 per cent in April.

According to officials, staggered early rains in parts of the country had impacted coal movement along with the claim that power demand was not as high as anticipated.

The country’s power demand is expected to cross 220 Gw by June. Peak power demand touched 200 Gw at the beginning of the year, but has come down due to unseasonal rains since then. In April, the power demand hovered around 180-185 Gw.

Anticipating higher power and coal demand, the Ministry of Power mandated all power generators to import coal up to 6 per cent of their requirement. 

Andhra Pradesh, Tamil Nadu, Karnataka, and Maharashtra were among the states to have placed imported coal tenders.

On the domestic coal front, coal production touched a record high of 893mt by the close of last fiscal, out of which, national miner Coal India produced 703mt, its highest ever.

Meanwhile, total coal volumes of railways (industrial and power sector) stood at 62mt in April, a 7 per cent increase over last year. Data suggests that industrial coal has also seen higher growth this year, as its supply had been curtailed last year to prioritise adequate supply for power plants.

The national transporter aims to ferry 75 mt of coal in May, sources said.

In May and June 2022, the Indian Railways was forced to cancel over 1,000 passenger train trips in and around the South East Central Railway zone as the nation stared at an imminent threat of a power crisis owing to a coal shortage at thermal power plants.

Railways’ overall freight grew barely 3 per cent over last year, ending the month at 126 mt. Freight estimates for FY24 Union budget have been kept conservative owing to higher focus on upgrading track infrastructure, which affects movement of freight trains.

The Indian Railways needs to maintain a growth rate of at least 10 per cent to meet its aim of 45 per cent modal share in national freight by 2030, as envisioned under the National Rail Plan.