As summer approaches, the surge in demand for power – both literally and politically – is anticipated to reach historic levels. This has compelled the government to proactively increase its coal reserves for electricity generation.
New Delhi: The government is gearing up to bolster India’s coal reserves to meet the surging power demand in the upcoming summer months, a crucial necessity against the backdrop of the anticipated general election in April or May.
Coal secretary Amrit Lal Meena revealed in an interview that the total coal reserves, including stock at pitheads, thermal plants, and in transit, are projected to increase by almost 9% to reach 125 million tonnes by 1st April.
“Stocks witness an upsurge from January to 15th March, following which a decrease in stocks is observed due to the rise in temperatures,” Meena stated.
As of 26th December, the total coal stock amounted to approximately 91.5 million tonnes. Meena anticipates the coal stock solely at the plants to reach 40 million tonnes by the end of the fiscal year, marking an increase of nearly 18% from the same period a year ago.
At present, the coal stock at the plants is at around 31 million tonnes, sufficient for 15 days, Meena underlined. Despite the escalating consumption and the surge in power demand, the country will have a favorable coal availability position,” the secretary assured.
The prospect of expanding coal reserves becomes consequential as the demand for electricity is expected to remain heightened in the upcoming fiscal year. The Central Electricity Authority projects the power demand to peak at 256 GW in 2024-25.
The ongoing fiscal year saw the peak power demand at 239.9 GW on 1st September, the highest ever recorded.
Unprecedented Increase in Coal Production
India’s cumulative coal production from April to December reached 684.31mt, showing a significant increase of 12.47% from the 608.34mt produced during the same period the year before. The coal ministry stated that the sector has experienced an unprecedented upturn, with production, dispatch, and stock levels reaching remarkable heights.
In December, coal production surged by 10.75% from the previous year, amounting to 92.87 million tonnes. During the same period, approximately 86.23mt of coal was dispatched, marking an increase of about 8.36% from the previous year.
With the anticipation of a growing demand for electricity, the power ministry has instructed domestic coal-based power plants to continue blending 10% imported coal until March. Additionally, it has required imported coal-based plants to operate at full capacity until June.
Initially issued in January 2023 and effective until September, these directives were extended by the power ministry due to the lack of availability of domestic coal and the projection of high demand, especially during April to June.
State-run coal companies have responded by intensifying their production efforts. According to the coal ministry, cumulative coal production has reached 684.31 million tonnes, indicating a 12.47% increase from the previous fiscal year. The government aims to elevate coal production to over 1 billion tonnes in the current fiscal year, with a target of 1.5 billion tonnes by 2030.
Coal India Ltd has experienced a significant surge in cumulative coal dispatch to 709.80mt, marking an 11.36% increase this fiscal year, as per the coal ministry. Furthermore, the company’s supplies to non-regulated sectors, including cement and steel manufacturers, witnessed a substantial rise, reaching 98mt as of December, reflecting a 31% increase from the corresponding period in the previous year.
CIL’s offtake to power plants also exhibited growth, totaling 454mt between April and December, which is 8mt higher than the committed quantity for the period and approximately 5% higher than the same period the previous year.
India’s Coal Logistics and Import Trends in the Current Fiscal Year
In the current financial year, Meena reported that logistical issues are improving and rake availability for transporting coal has increased by approximately 11%. This has led to a reduction in the import of coal for blending, with only 17.2 million tons (mt) imported so far in FY24, compared to 25.63mt during the same period in the previous fiscal year.
Despite India’s ambitious net-zero emissions target and commitment to install 500 GW of renewable energy capacity by 2030, the government has continued to prioritize coal production.
The urgency to enhance coal supplies heightened after India experienced a near-crisis situation due to a sudden surge in post-COVID demand in September-October 2022 and April-June 2023. This surge was largely driven by the resumption of economic activities.
Furthermore, the Center intends to establish new thermal power capacity of 12 GW by the end of the current fiscal year. Currently, India’s thermal capacity exceeds 205 GW.
By addressing logistical challenges and increasing domestic coal availability, India is working to manage its coal needs while striving to achieve its renewable energy targets.
