Moneycontrol
Nov 15, 2017 07:55 AM IST | Source: Moneycontrol.com

Cool weather eases pressure on coal stock shortage

The time gap will help the sector to be ready for the next high demand season - when the northern region experiences winter in full force.

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Due to the rising electricity demands and excess rainfall a few months back, the coal sector has been witnessing a supply shortage. However, now, according to Business Standard, the pleasant weather is lowering the electricity demand and in turn, demand for coal.

The Ministries of Coal, Power and Railways plan to take this weather to their advantage and increase the coal supply. The time gap will help the sector to be ready for the next high demand season - when the northern region experiences winter in full force.

“This month should give us a buffer to prepare ourselves. The three ministries are in regular discussion to prepare a plan for robust coal supply to power sector when the demand increases from  December onwards," sources told the paper.

The demand for coal increases in winter because of heating requirement and agricultural purposes.

According to the Central Electricity Authority (CEA), coal stock at power units has an average of 6 days stock as on November 9, 2017.

The coal shortage arose in August where India was experiencing heavy rainfall, humidity and warm weather. The demand in August had suddenly increased by 18 percent and gradually declined by 2.9 percent and now is in the process of settling down.

Along with the sector using this period to buffer their stocks, the CEA has also issued guidelines for maintaining the coal stocks, supplying the coal and daily stock reviews. The Deccan Chronicle report says the CEA has set up an inter-ministerial subgroup which will keep a check on the coal supply position every week to ensure there is no shortage of coal in the power plants.

The subgroup is constituted by the infrastructure constraints review committee. The subgroup is led by the Coal Joint Secretary and consists of power, coal and railways representatives, shipping ministries, CEA, Coal India, Singareni Collieries and NTPC.

The move comes after the power plants have complained of the supply constraint and how the industry was unable to meet the fuel and power demands. Coal, which helps in generating power and fuel, was first the only way to generate electricity.

Out of the total 1, 050 rakes, around 400 goes to the coal sector and the rest is shared among iron ore, cement, among other sectors. The power sector claims to be the victim of the coal crunch, even though the railways claim that they give enough to the power sector.

According to the Hindu Business Line, the crunch was felt due to a reduction in hydro, nuclear, and wind power generation. The power plants were running on less than half-a-day stocks when there was a demand surge.

However, the other coal-driven sectors complain about rake diversion to the power sector from their share.
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