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Informist, Tuesday, Aug 13, 2024

 

KOLKATA – Coal India Ltd has removed the upper cap on sale of coal to domestic power plants, effectively, allowing them to purchase coal even beyond the contracted limit. The move is aimed at clearing its stocks and ramping up its sales volumes. 

 

 

Under the previous framework which Coal India followed for decades, the Maharatna company sold coal to power plants at a pre-determined level. In times of normal supply with the company, it sold coal in accordance with the pre-determined volume. 

 

However, in times of abundance, it allowed power plants to buy 20% more coal over the contracted volume. Coal India has now removed this 20?p and power plants can purchase any amount of coal they deem fit, the company said in a statement.

 

Only those power plants who have signed long-term coal purchase agreements with Coal India can avail this facility.

 

Of the 153 domestic coal based power plants in the country, Coal India has long-term linkages, or long-term coal supply agreements, with 127 plants, totalling a contracted volume of 592 mln tn. The country has a total of 54 domestic coal-based independent power plants, or private power plants and Coal India has linkages with 50 of them for a total contracted volume of 155.7 mln tn.

 

Around two years ago, when the country was grappling with coal shortage, Coal India had prioritised sales to state-owned power producers. Due to an abnormal sudden spurt in demand, Coal India could not meet the contracted sales volume with the power plants. It then, led to a surge in imports.

 

Consequently, sales to independent power plants had dried up then. "The situation started normalising 1.5 years back and now India has abundant coal; so getting coal is not a problem now," a Coal India official told Informist.

 

Coal India's decision comes in wake of huge coal stock of 72 mln tn, up 47% on year, as on Monday.

 

Coal India's supply to coal-fired plants peaked to an unprecedented 619.7 mln tn in 2023-24 (Apr-Mar) which overshot the projected demand from power plants by 1.6%. In the last financial year, coal supplies to the power sector grew by 5.4% year-on-year.

 

In the statement, Coal India said that during 2023-24, the generation through domestic coal-based power plants was 1,177 bln units. Of this, tentatively 78% of the generation, or 915 bln units were supplied by Coal India.

 

Shares of Coal India today closed 0.4% lower at 521.8 rupees on the National Stock Exchange.  End

 

Reported by Avishek Rakshit

Edited by Akul Nishant Akhoury

 

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