Stable coal supplies to power units, cooler weather and long weekend ease crisis

The coal crisis in the power sector seems to be easing as supply stabilised, more fuel-starved generation projects came online - including one based on imports - while cooler weather in north India and an extended weekend dampened demand.

States lifted power supply curtailment orders as the situation improved. Bilaspur-based Coal India (CIL) unit South Eastern Coalfields will withdraw its directive to suspend supply to non-power utilities, government officials told ET.

However, the non-power sector complained of coal shortages, and sought urgent government intervention to improve supplies and keep plants running.

The average coal stock at power plants is still only enough for four days of generation but more of them were able to generate electricity without any hitch, according to October 13 data. As of that date, plants with a capacity of 137 GW had low stock, down from 142 GW on October 12.


Coal supplies are expected to ramp up, with Navratri having ended and Durga Puja over.

Average spot prices on the Indian Energy Exchange cooled to ₹9.67 per unit on Friday for Saturday delivery, from ₹14 last week, as demand eased on the back of dipping night temperatures and the extended weekend. Friday was shut for Dussehra.


A top Punjab State Power Corp official said the power crisis there seems to be abating. The state reported no outages and has lifted electricity curbs imposed on industrial units. Uttar Pradesh, too, did not report outages due to low coal stocks at power plants, according to a state official. Rajasthan Rajya Vidyut Prasaran Nigam chairman Bhaskar Sawant told ET that the energy deficit in the state has narrowed.

Non-Power Sector Concerns
RVPN's Sawant expects things to improve over the next few days.

Following Punjab and Gujarat, Rajasthan has also agreed to buy 150-300 MW power from Tata Power at Rs 5.4 per unit, said people with knowledge of the matter. The situation in Andhra Pradesh has also eased. All states expect to reduce their dependence on spot power markets over the coming days.

Meanwhile, non-power consumers - including aluminium, paper and cement companies - have lobbied with the coal ministry against curtailment of supply from CIL subsidiaries.

The ministry issued directives to CIL to regulate supply to non-power units until the average stock at power plants improves, a senior government official said. Restrictions will be eased in the next 10-12 days, by which time average inventory at power stations is expected to reach a comfortable level of six to seven days, he said.

CIL had suspended spot coal auctions to the non-power category to prioritise the replenishment of inventory at power stations.

Executives at two aluminium companies said they are grappling with critically low levels of coal, with no alternative means of meeting their needs and keeping plants operational. "If coal supply is not restored immediately, it would lead to irrevocable collateral damage of these national assets," an executive said.

The government official cited above, however, said average coal dispatches to non-power consumers were 260,000 tonnes in the past five days, against 300,000 tonnes on normal days.

The industry has captive power plants with a capacity of 9.4 GW and can't import coal at short notice. Also, the large power requirement of such plants cannot be met through power exchanges.