Coal news and updates

Coal stock levels at Indian power plants fluctuate widely

August 11: Coal stocks at Indian power plants showed wide fluctuations over the past 17 months during which volumes touched a high of 23.08 million tons (mt) in August 2013 and a low of 9.819 mt in July 2014, according to a compilation made by ICMW based on data from the Central Electricity Authority (CEA).

The average daily coal stocks at Indian power plants used to hover around 7-8 mt levels till 2012, but a change in the scenario came about after Coal India Ltd (CIL) started liquidating its pithead coal stocks at a faster clip. The stocks at power plants started rising not only due to stock liquidation by CIL, aided by increased availability of rakes from railways, but also because of a rise in production.

While, on one hand, there was a rise in coal supplies by CIL, the demand for coal from power generators did not rise in the way it was expected due to low demand from distribution companies who were reeling under adverse financial conditions.

However, the situation started deteriorating, so far as coal stocks at power plants are concerned, from September 2013 on the back of increase in demand for electricity that led to higher demand for power.

As a result, coal stocks with power plants fell to 17 mt towards the end of October 2013 and further to less than 15 mt by end-December, 2013.

However, with the fall in household demand for electricity during winter and a low demand from the industrial sector due to sluggish growth in overall economic activities, coal stocks again started piling up from January 2014 which continued till March 2014.

But, the general elections and an eagerness among state power generation companies to produce more electricity, that was boosted by a slight revival in industrial activities, started impacting coal stock levels at power plants from April onwards, which is continuing till now.

In fact, coal stocks at power plants fell steadily after March 2014 and declined to 18.32 mt in April, 15.45 mt in May and 13.07 mt in June.

But the worst was in store for July 2014 when stocks dipped to a low of 9.819 mt.

Even as CIL claims that low stocks at power plants are due to higher generation at new plants and less-than-planned purchase of imported coal by plants, the power sector claims that CIL’s supplies to a large number of plants were much lower than the quantities agreed upon as per the fuel supply agreements (FSAs).

The following table shows coal stocks positions at Indian power plants from March 2013 to July 2014 and electricity generation in the same months of the mentioned period: