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Coal stock is low due to faster consumption: Goyal

September 8: Coming to the defence of Coal India Ltd (CIL), India’s coal minister Piyush Goyal has said that the current low in coal stock at India’s power plants is due to faster consumption which is reflected in the high growth in generation in the recent months.

“There is no low coal supply….but the fact (is that by) using the available resources we have increased electricity supply by 21% which is only coal based,” the minister said.

Coal-based power generation on an average has increased by a record 21.4% during June to August 2014 compared to the same period last year.

He pointed that power generation in June and July this year was up by 20.8% as compared to June and July 2013 while the generation in August this year was up by 22.6% against previous year.

The minister said power generation in India had been growing over the past few years, but the pace of growth in July-August period of this year was much higher.

“In June, July and August 2013, the growth in power generation was 3.5%, 3.5% and 5.5%, while the growth was 17%, 11% and 11% in June, July and August respectively of 2012. The growth in the three months of 2011 was 7%, 10% and 5% respectively,” Goyal said.

Goyal’s claim was in tune with some power utilities' claim of an increase in Plant Load Factor (PLF) in recent months. The PLF of state-run companies such as NTPC and DVC in July stood at 71.5% in July.

Incidentally, CIL had last month maintained that it should not be blamed for low coal stock positions at power plants as some of the power plants are importing less coal than requirement and are also operating at higher capacity utilisation than standard 85% PLF.

“Almost all the new power plants are supposed to get only 65% of their total coal requirement from us as per the fuel supply agreements (FSA) and the rest of the fuel is to be sourced through imports. But, instead of arranging for imports, these plants are blaming us for their low coal stock positions,” a CIL official said.

“In certain places where both new and old plants are running together, it has been found that the average PLF is over 100%. If they are running at more than 100% PLF against the normative 85% and have not arranged for imported coal, they will naturally face coal shortage,” he added.

Incidentally, NTPC CMD Arup Roy Choudhury too had acknowledged during an interaction with media person in Kolkata on August 29 that the company had been bye and large getting normal supplies of domestic coal, but they need more coal to generate more to meet country’s power demand.

He pointed that during recent summer season, there was huge demand for power and consequently the demand for coal and FSA quantity coal was not enough and because of this, it always becomes an issue in the country because then questions are raised why coal is not available in the country and things like that.

“But the fact is whenever there is demand for power we will have to burn coal to generate that power,” he said.

Asked about allegation of CIL that shortage of coal is because of low import by power plants and also because of a tendency among power plants to operate at higher PLF, Choudhury said, “This (operating at high PLF) is not because of our choice. We are compelled to operate at high PLF in the interest of the nation.”

Being a government owned company, NTPC cannot just reduce or stop production whenever there is any issue, he said.

“So higher generation is due to higher demand.  However, this has to be appreciated that CIL is also correct because they have to supply coal to the extent we can operate at 71% PLF. But who is allowing me to operate at 71% PLF. As per CERC/CEA directive we have to operate at 85% PLF. Most of our plants are operating at above 85% PLF and the situation is such that even if we operate at 100% PLF, there will be taker for power,” Choudhury had said.