With coal supplies improving at power plants, the non-power sector companies steel, aluminium, chemical, cement, etc are feeling the pinch of diversion of coal as power plants are accorded the highest priority now.
CNBC-TV18 learned from sources that for the next fortnight or so, supplies to the non-power sector will be curtailed and not suspended. This comes on the back of various reports suggesting Coal India (CIL) has directed its subsidiaries to refrain from conducting e-auction of coal for non-power companies on October 13.
Reports also suggest Coal India subsidiaries are also informing Railway authorities about the suspension of coal supplies to the non-power plants.
Coal India is ramping up supplies to power plants in preference over non-power plants but record volumes have been offered in the first half of FY22 to the sector as per demand until two weeks back, government sources told CNBC-TV18.
“With a view to stock up coal at thermal power plants, coal companies are ramping up more supplies to them in preference over non-power. In the H1, CIL offered record volumes of coal auction to the non-power. Most of them stocked up. Even now until 2 weeks back they received coal as per their demand. And that too at proves contracted before the surge in international prices. So, they have received full support. For the next fortnight or so, their supplies will be curtailed and not suspended. Auctions will also be done as per availability which is the established norm. Overall coal supply to non-power this year will be a record high ever is assured,” said a source in the government.
The Aluminium Association of India (AAI) and Federation of India Mining Industries (FIMI) have both raised the issue of suspension of coal supplies under linkage and unavailability of coal for spot e-auction at a time imported coal prices are at a high.
“The recent decisions for stoppage of secured coal supplies and rakes for Non-Power Sector is detrimental for Aluminum industry and will jeopardize the sustainability as these continuous process based plants are not designed for Adhoc shutdown and start of operations. The coal stocks of operational plants have depleted to alarmingly low critical stocks of 2-3 days, from the level as high as 15 days in the month of April, 21, and plants are forced to operate at reduced power generation with a huge risk of closure with the threat of loss of huge employment and deterioration of MSMEs. Moreover, the ongoing global Aluminium shortage due to supply-demand mismatch is also adding to the woes for the industry with the current coal situation in India,” said the Aluminium Association of India.
Meanwhile, the Ministry of Power has said that coal-based capacity under outage due to coal shortage has reduced 11,000 Mega Watt (MW) on October 12 to 6,000 MW on October 13. As of October 12, 65 coal-based power plants had less than 4 days of coal stock which is considered supercritical and the peak shortage was recorded at 5,591 MW on the same day with electricity demand met at 3,918 million units.
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