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An inter-Ministerial sub-Group led by Ministry of Coal has been monitoring the coal stock situation twice a week. In order to manage the coal stock and ensure equitable distribution of coal, Ministry of Power constituted a Core Management Team (CMT) on 27.08.2021 comprising of representatives from MOP, CEA, POSOCO, Railways and Coal India Limited (CIL) to ensure daily monitoring. The CMT is closely monitoring and managing the coal stocks on daily basis and ensuring follow up actions with CIL, Railways to improve the coal supply to power plants.

CMT in its meeting held on 9th Oct,2021 reviewed the status. It was noted that on 7th Oct,2021 total dispatch of coal by Coal India limited (CIL) touch 1.501 MT thereby reducing the gap between consumption and actual supply. Ministry of Coal and CIL have assured that they are making best efforts to increase dispatch to power sector to 1.6 MT per day in next three days and thereafter try to touch 1.7 MT per day. It is likely to help in gradual build up of coal stocks at the power plant in near future. The coal supply as well as consequent power situation is likely to improve.

There are four reasons for the depletion of coal stocks at the power plant end- unprecedented increase in demand of electricity due to revival of economy; heavy rains in coal mine areas during September, 2021 thereby adversely affecting the coal production as well as despatch of coal from mines; increase in prices of imported coal to unprecedent high level leading to substantial reduction in power generation from imported coal based power plants leading to more dependence on domestic coal; non-building of adequate coal stocks before the onset of Monsoon. There are also legacy issues of heavy dues of coal companies from certain states viz., Maharashtra, Rajasthan, Tamil Nadu, UP, Rajasthan and Madhya Pradesh.

 A surge in revival of economy after second wave of Covid, led to unprecedented increase in demand and consumption of electricity. The daily consumption of electricity has crossed beyond 4 Billion units per day  and 65% to 70% demand is being met by coal fired power generation only, thereby increasing dependence on coal.

Power consumption for the period August-September has progressively increased from 106.6 BU per month in 2019 (normal non covid year) to 124.2 BU per month in 2021. During this period the share of coal-based generation has also increased from 61.91% in 2019 to 66.35% in 2021. As a consequence, total coal consumption in the month of August-Sept, 2021 has increased by 18% in comparison to corresponding period in 2019.

Imported coal price of Indonesian coal jumped from $60/ton in March-2021 to $160/ton (in Sept /Oct, 2021) of 5000 GAR (Gross as received) coal. The import of coal has decreased in comparison to 2019-20 due to import substitution and rising prices of imported coal. The reduction of imported coal is compensated by the domestic coal for power generation, hence increasing the demand for domestic coal further. As compared to 2019, there has been  43.6% reduction in power generation from imported coal which led to extra demand of 17.4 MT of domestic coal during Apr-Sept,2021.

Ministry of Power has issued guidelines on 8th Oct,2021 for operationalizing optimum utilization of generating stations as per the requirements in the Electricity Grid. These guidelines will enable imported coal based plants (having sufficient coal) to operate and ease out the burden on domestic coal.

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