40 million tonne of coal stock will available with thermal power plants by March: Coal minister

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Union coal minister Pralhad Joshi on Wednesday announced that as much as 40 million tonne of coal will be available with thermal power plants (TPPs) by March next year, a feat which the government has not been able to achieve until now resulting in repeated power crises in several parts of the country during peak summer or monsoon season.

“In the next few months, India is likely to become Aatmanirbhar in thermal coal production. Forty million tonne of coal stock will be available with thermal power plants by March next year. As on October 1 this year, the stock with thermal plants was 24 million tonne,” Joshi said in an event where Coal India Limited (CIL) signed Memorandums of Understanding (MoU) with five leading PSUs for coal gasification projects.

The minister’s announcement is significant because as TPPs in India managed to have a combined reserve coal stock of only about 24-25 million tonne, which is enough to generate power for about 10 days.

India faced its worst power crisis in over six years in April this year due to higher electricity demand because of a sudden heatwave which spiked the country’s power demand to an all-time high of 210,793MW on June 9. This happened despite record coal production by CIL in fiscal 2021-22. The steep electricity demand caused widespread power cuts in April, as the authorities scrambled to manage demand amid dwindling coal supplies.

Power ministry officials said domestic coal production has increased in the country, but not at the same pace as the electricity demand. The requirement for domestic coal during Q1 of the current fiscal was projected to be about 20 percent more than the same period of last year.

Data also suggests the same - the all-India coal production (for all categories of consumers) in the year 2021-2022 was 778.19 MT in comparison to 716.083 MT in the year 2020-2021. However, the power demand has gone up exponentially because of the growth of the economy post-Covid-19 and also because of the 28.6 million new consumers added under Saubhagya.

“Another reason for the rise in demand is also that we have strengthened the transmission and distribution system which is increasing power consumption,” said a senior power ministry official requesting anonymity.

To ease the situation and take the load off domestic coal, the government had then stepped up imported coal blending, which was contrary to the Centre’s stand until last year when it said in December 2021 that there should be no coal imports other than very essential ones. The move was stiffly opposed by several states who reasoned that imported coal was at least five times more expensive than domestic coal. However, later as the situation eased, the power ministry lifted the mandate of 10 percent blending of imported coal for all generation companies.

As per data shared by the power ministry, in the months of April, May, and June, the blending of imported coal by generation companies saved as much as 10 million tonnes of domestic coal.

Meanwhile, CIL on Wednesday signed MoUs with Bharat Heavy Electricals Limited (BHEL), Indian Oil Corporation Limited (IOCL), and GAIL (India) Limited for setting up large-scale coal-to-chemical projects through surface coal gasification.

The proposed surface coal gasification (SCG) projects will be set up in West Bengal, Odisha, Chattisgarh, Maharashtra, and Tamil Nadu and will be built at an aggregated estimated cost of Rs 35,000 crores.

“Through the SCG route, coal is converted into syngas. This can be subsequently processed for downstream production of value-added chemicals which are otherwise produced through imported natural gas or crude oil at enormous cost.

"As the country’s four major PSUs huddle together, the move is aimed at reduced forex outgo, promoting self-reliance and capitalisation of indigenous resources. Another upside will be employment generation with direct employment of around 1200 personnel and indirect employment to the tune of over 20,000 persons,” the coal ministry said in a statement on Wednesday.