Coal news and updates

Coal shortage: Window dressing statistics for a crisis

Look behind the political spin on the numbers, the purported shortage of coal is a result of every other factor but slow production of coal...

Is there a coal crunch in the country since the beginning of this month? Yes. But only because the country produced an expected 22% more energy from the coal-based thermal power plants this August as compared to the same month previous year. This made the requirement for daily stock of coal at the thermal power plants shoot up by almost a quarter in August on a year to year basis.

So, even when Coal India Limited was producing and supplying 5% more coal for August than planned, the CEA data suggested that there was a huge shortage of coal and 56 plants were facing a critical crunch with coal stocks less than seven days worth.

With the Supreme Court case on coal blocks looming large, the CEA data on coal stocks - that it has released for years now on daily, weekly and monthly basis - has suddenly picked up a political tenor. But look behind the political spin on the numbers and it's easy to see, the purported shortage of coal is a result of every other factor but slow production of coal.

Last year in August the coal-based power plants produced 50,842 Gigawatt hour of energy. This year that went up to 62,310 gigawatt. This was partly to do with 5% better plant load factor -  the efficiency at which the power plants work - and partly to do with 6,000 MW of additional power capacity operating in August this year compared to last year.

But what went up alongside - quite naturally - was the daily stock requirements of these thermal power plants as they kept pumping out more power than earlier planned. So take the northern region where the daily requirement of stocks was 352,700 tonnes per day last year August, it had been upped to 447,000 tonnes per day in August this year - an increase of 28%. For the nation-wide 100 odd power plants the CEA keeps tabs on, the benchmark for daily requirement of coal was increased from 1.27 million tonnes to 1.54 million tonnes.  Now, even when the CIL met 96 % of its August 2014 target and improved by more than 55 over previous year production figures it was bound to fall below the requirement.  To only take of the shortage of coal without explaining the background is therefore plain jugglery.

The last time the there was a similar hullabaloo over looming power crisis a letter from NTPC talking of a major shortage of coal at its six power plants during mid-July was shared with media.  The numbers were prepared by the night shift in-charge of the plants and passed on by NTPC to the power ministry. It was such a shoddy job that even simple calculations of addition and subtraction had been botched up in the excitement of building a crisis. Again, a detailed analysis showed that actually Coal India Limited had provided substantially more than 100% of the annual contracted quantity to NTPC's three major power plants.

Out of these power plants, Singrauli, Vidhayanchal and Rihand, only the first two had produced 2% more energy than previous year for the same period and Rihand saw a drop of 2 percent power generation. But CIL's supply to NTPC for these plants for the same period had gone up by 5% over the previous year. There were other logistical issues of the off-take of coal from CIL by the power plants being slower than planned though.

The current episode reminds one of the earlier UPA regime's attempt to fool the Supreme Court in the coal scam case. It brought out a huge docket showing how Rs 2.86 lakh crore worth of investments were dependent on the coal blocks under scrutiny. Only when prodded deeper it soon came out that much of these were investments made  years (in some cases decades) before the coal blocks were allocated and were of industries that had existing coal linkages and other sources of coal. The government hastily withdrew the data from the court though it played in the media for a while - almost to plan, one would think.

The present crisis of coal stocks is clearly about bad management of resources in a low monsoon year not about lack of them. Now that the Supreme Court's order is out, the coal sector in India needs to restart with a clean slate not by sleight of numbers or deft massaging of statistics.

Source: Business Standard