Power generators’ inventories are available for only eight days
LONDON, May 12 India’s distributed coal stocks remain critically low as the country struggles to produce and transport enough fuel to meet surging demand from power generators.
Power generators’ inventories are equivalent to just eight days worth of consumption compared with 16 days at the same point last year and before the pandemic.
In a normal year, distributed inventories increase over winter, when lower temperatures reduce electricity demand and generation, and the end of the monsoon permits greater coal production.
But stocks have remained persistently low at seven to nine days since August 2021 despite a government campaign to increase mine output and distribution.
Restocking has been dealt a further blow by a heatwave across the country over the last two months boosting air conditioning and refrigeration demand.
Power producers’ stocks are at the lowest pre-summer level for nine years, which will constrain generation and ensure blackouts continue.
Coal production increased by 26 million tonnes (9 per cent) in the first four months of the year compared with the same period in 2021.
Distribution rose by 29 million tonnes (11 per cent) over the same period, statistics prepared by the Ministry of Coal show.
At the same time, the government has ordered mines and the railway network to prioritise deliveries to power generators.
Coal despatched to the power sector increased by almost 39 million tonnes (18 per cent) in the first four months of the year.
But the consequence has been a drop of 10 million tonnes (18 per cent) in deliveries to industrial users, including the steel, cement and aluminium sectors.
In effect, the government has supported the supply of coal to electricity generators by worsening shortages in the rest of industry.
In common with other countries in other periods, including Britain and China, the rail network has emerged as a major constraint on boosting coal supplies.
The total number of coal trains loaded and despatched every day in April 2022 was no higher than in April 2021, according to the Ministry of Coal.
The tripartite plan between the coal industry, railway and government called for an average of 336 trains a day to be loaded in April, but the system managed only 276, unchanged from April 2021.
Trains despatched to power producers increased by almost 18 per day (7 per cent) compared with the same month a year earlier, but with the loss of 18 per day (56 per cent) to all other users.
There may be scope to increase total delivery capacity by debottlenecking, increasing average train speeds and reducing dwell times at both pits and power stations to make more intensive use of the rolling stock.
In addition, the government has already intervened to reverse, at least partially, the normal prioritisation given to passenger trains over freight in a bid to move more coal faster.
Until more rail deliveries can be made, however, stocks are likely to stay under pressure and electricity generators will struggle to meet peak demand.