Business Standard

Govt banks on coal to power nation in summer

As extreme heat wave looms, peak demand expected to cross 265 Gw


The heat is already on for India’s power grid and its managers to plan for optimum supply, as the summer inches closer with gloomy projection­s of extreme heat wave and record electricit­y demand. The government is expecting a major share of the load to fall on coalbased power to meet demand and is boosting coal supply at all ends.

Senior officials said the coal requiremen­t submitted by the power ministry is 875 million tonnes (MT) for the current financial year, and the coal ministry has agreed to it. This translates into national miner Coal India Ltd (CIL) supplying this amount of coal for the period. The peak power demand is expected to touch or even cross 265 gigawatt (Gw) during the summer months.

Speaking with Business Standard, Amrit Lal Meena, secretary, Ministry of Coal, said the coal companies were geared up to supply the required amount. “We are confident of producing the required coal capacity. We have also eased several logistical issues to improve coal availabili­ty at the level of thermal units,” Meena said.

The ministry has introduced mechanised coal loading facilities at close to 40 locations of all the seven production firms under CIL. From around 10-15 per cent of coal loaded through mechanised facilities, it is expected to go up to 3335 per cent this year. “This will reduce rake loading time to 45 minutes from three hours and improve the turnaround time of coal-carrying rakes,” said an official.

Sector experts are of the view that the share of renewable energy will rise only minimally. Coupled with it is the late arrival of hydropower this year as snowing was delayed in the northern region. “Electricit­y demand is expected to grow by 5.5-6 per cent in FY25 and the peak demand is expected to increase from 243 Gw in FY24 to 255-260 Gw in FY25. While the share of renewable, including large hydro, is likely to increase from 23 per cent in FY24 to 24-25 per cent in FY25, coal would remain as a major source of power supply and is expected to account for 73-74 per cent of the electricit­y generation in FY25,” said Girishkuma­r Kadam, senior vicepresid­ent and group head - corporate ratings, ICRA Limited.

Anticipati­ng high power demand, the Ministry of Power recently directed all the power producers to continue importing 6 per cent of their coal requiremen­ts until June. In a recent note, the power minister underscore­d that domestic coal availabili­ty would not be enough to meet the required demand. “The status of power supply has been reviewed by the ministry and as per the projection­s, the peak demand is likely to reach up to 250 Gw in summer season (April-june 2024). It has been further observed that despite the increase in loading of domestic coal rakes, the supplies of domestic coal will remain constraine­d due to various logistical issues associated with the railway network,” the recent directive said.

The Ministry of Coal is, however, confident that there will be sufficient domestic coal. “We will have nearly 150 million tonnes (mt) of stock by March 2024, including 45 mt in thermal plants,” Coal Minister Pralhad Joshi said last week. The current stock at thermal power plants stands at 46.8 mt, which translates into 16 days of coal stock.

Kadam highlighte­d that coal supply from domestic sources met 93 per cent of the requiremen­t for power plants in India in FY23, with imports constituti­ng the balance. He said that it would be replicated this year. “The dependence on coal imports is likely to remain in a similar range of 7-7.5 per cent in FY24. The government continued the mandate directing domestic coal-based power plants to import and blend coal till June 2024. In this context, ICRA expects imports to constitute 6 per cent of the coal consumptio­n by power plants in FY25,” he said.

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