Coal scarcity: Amid precedence to thermal vegetation, non-power sectors bear brunt

Prioritisation of coal provides for the ability sector have led to rising enter prices for the aluminium, metal and cement sectors and should result in extended shutdowns at some vegetation, in keeping with consultants.
Industry associations have written to the Coal Ministry requesting a resumption of regular provide to non-power sector customers of coal as stock at thermal energy vegetation which had fallen to 4 days of inventory in October has improved to 11 days of inventory.
Since July, the Centre has directed Coal India Ltd (CIL), India’s largest provider of coal, to prioritise provide to thermal energy vegetation, sharply decreasing the provision of the dry gas to non-power sector gamers, in keeping with business sources.
Low coal shares at thermal energy vegetation pressured many states together with Uttar Pradesh, Rajasthan and Punjab to impose load shedding in October, as states rushed to energy exchanges paying three-four instances regular charges for energy on account of insufficient provide.

“The situation is very serious for non-power sector consumers and there doesn’t seem to be a resolution in sight,” mentioned an professional who didn’t want to be quoted.
Aluminium, metal and cement sectors utilise home coal to generate energy at captive energy vegetation to run operations. Such sectors are being pressured to make use of buy costly imported coal in addition to draw dearer energy from the grid on account of low coal provides. Aluminium vegetation specifically have raised issues about coal provide as even a two-hour interruption in energy provide at such vegetation may result in extended shutdowns earlier than they will come again on-line.
An business supply conscious of developments mentioned, “The requirement for non-power coal consumers is about 45-50 rakes of coal daily and the supply fell to about 27 rakes in October and improved to 33-34 rakes in November, but has fallen again due to prioritisation for the power sector.”

One rake consists of 58 prepare wagons and might carry as much as 3,750 tonnes of coal.
Industry sources famous that whereas provides to non-power sector customers had improved in November, they’d fallen once more in December after a authorities directive that provides be prioritised for the ability sector. Union Power Minister RK Singh had indicated in October that the coal provide points for the ability sector may proceed until February or March.
India’s thermal energy vegetation at present have about 11 days of coal inventory on common, in comparison with a advisable degree of 15-30 days primarily based on the gap of the thermal plant from the supply of coal.
Coal inventories had fallen to about 4 days price of inventory in early October when quite a lot of thermal energy vegetation ran out of coal, slicing energy provide and pushing up the typical market clearing worth of energy in October a peak Rs 8.0 unit on the India Energy Exchange up from Rs 2.7 per unit in October 2020.

In an official response to queries from The Indian Express, the Coal Ministry mentioned that provides to non-power sectors had been “robust” until November, noting that CIL and Singareni Collieries Company Ltd had equipped a mixed 88.4 million tonnes (MT) of coal to non-power sectors between January and November, up from 83.8 MT in the identical interval final 12 months. The ministry didn’t, nonetheless, reply to queries on the provision of coal to non-power sectors in 2019 which was unaffected by the Covid-19 pandemic.
“The increased prices of coal in the international market has resulted in non-power consumers seeking cheaper domestic coal whose notified prices has not increased for almost 4 years now. However, with the increased coal production and despatch from coal companies, the supply to non-power is likely to increase further,” the ministry mentioned.