Coal dispatch in India declines but thermal power plants have sufficient stocks amid economic slowdown

KOLKATA (miningweekly.com) – Despite a decline in coal supplies to the power sector by State-miner, Coal India Limited (CIL), during April 2019 to January 2020, no thermal power plant of India’s largest power producer, NTPC, is facing any shortage of dry fuel, indicating low demand for energy and overall economic slowdown.

As per information available from CIL, coal supplies to the thermal power sector during the first nine months of the current financial year are down 7%, at 378-million tons. For the first time in three years, no thermal power plant operated by NTPC or through any of its joint ventures faces a coal shortage or is categorised as ‘critical’ or ‘super critical’ in terms of fuel stocks by Central Electricity Authority (CEA). Officials say that every power plant operated by NTPC currently carries coal stock of more than 20 days equivalent consumption, well over the critical levels threshold.

Total coal stock at thermal power plants has been estimated at 34.25-million tons, sufficient for 20 days of operation of these plants, the officials add.

The decline in offtake by the power sector has also led to CIL carrying an estimated 31.24-million tons of dry fuel at the pitheads, ready for dispatch as and when demand from thermal power plants improved, the officials say.

The decline in offtake from CIL by the power sector is matched by the miner’s fall in production of 3.9%, at 451.2-million tons, during the April 2019 to January 2020 period, company data showed.

Sufficient coal stocks with thermal power plants rather than a comfort is being seen as an indication of overall economic slowdown and fall in electricity demand from the manufacturing sector. For the first time in 13 years, total electricity generation from coal has started to show a downtrend, with generation falling 3% during April 2019 to December 2019. Generation from coal-fired plants during the period was recorded at 780-billion units, according to data sourced from CEA.

While a section of the government maintains that the fall in generation of coal-based power plants is related to growth in renewables, a wide section of the industry said that lower coal-fired power generation was directly linked to a slowdown in manufacturing industries and gross domestic product growth, which is expected to be around 4.7% in the quarter ended December, an 11-year low.