Coal India warned government of coal shortage in February, documents show

Coal India warned government of coal shortage in February, documents show
Share This :

Coal India’s warned the adviser to the federal power ministry in February of an impending fuel shortage as utilities tapped inventories and curbed purchases despite rising coal-fired power output, documents reviewed by Reuters show.

India, which has the world’s fourth largest coal reserves, is facing a shortage of the fuel and has urged utilities to import coal as supplies at several plants run low.

State-run told the Central Electricity Authority (CEA) that it was “evident that a crisis is arising” unless immediate action was taken to increase supply to power plants, according to a Feb. 4 letter reviewed by Reuters.

Coal India, the world’s largest coal miner, generally asks utilities to stock up before the annual monsoon season when rains squeeze output and make transport more difficult.

But the company was more worried this year as coal-fired power output picked up with coronavirus-related restrictions easing, while utilities tapped stockpiles instead of buying fresh supplies, a senior official told Reuters.

Coal-fired power output grew nearly a fifth during the first eight months of 2021, outpacing overall generation growth of 13.2%. Coal accounts for more than 70% of India’s power capacity.

The company had also said it would increase supplies to the non-power sector as utility purchases slowed, saying it might “take time” to cater to power plants “even if there is a sudden spurt in demand.”

In another letter dated Feb. 25, the miner said power plants continued to use existing stocks despite requests to buy coal before the monsoon.

has been requesting power houses to increase the stocks at its power plants to prevent any crisis in the future resulting from shortage of coal,” a senior Coal India executive wrote to the CEA’s fuel management director.

Seven months after the letter was written, average coal stock held by Indian coal-fired plants declined to a near three-year low of six days in September, compared with an April 2020 high of 31 days, CEA data showed.

Nearly 100 of the 135 plants had less than seven days of coal stock left as of Sept. 13, the data showed. Federal guidelines mandate utilities to hold at least two weeks supply.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

, Coal India warned government of coal shortage in February, documents show, Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Source link

Share This :