Written by Saurabh Kumar, Anupam Chatterjee | New Delhi |
Posted: November 12, 2018 2:39:40
In October, Coal India's mines fell to a five-year low of 21 million tonnes (mt) in October, as a sudden increase in fuel demand from the electricity sector has been rapidly following shipment over the past few weeks. If low reserves of coal continue to flow, power supply could be interrupted, which would lead to power failure (low availability of equipment, technically).
The growing problem is the accelerated coal import in recent months, but the large price difference between domestic and imported coal still provides for imports. For comparable thermal grades, imported coal is at least one third more expensive than locally available fuel, and in some cases the landed costs of imported varieties are 1.5 times larger than the share of local coal.
As energy demand in the first half of this financial year was almost 8 percent higher than in the previous period, only October was up 11 percent (growth in recent years was below 5 percent), any inability of the domestic sector to meet the demand for coal, can upgrade imports in the coming months and additionally burdens the country's commodity trade and the overall current account deficit.
Although the annual production target of 610 million tonnes for coal, India, set by the government, the annual (FY19) is set in high order (between April and October, the miner produced 306 mt of coal, the October output of 50 mt was reflected by the acceleration) , its production is growing with a reputable 10% annually. Including other producers, such as SCCIL, various state entities and own production, the total production of the country in the first seven months of the current financial year was 377 million tonnes, again by 10 per cent year-on-year growth.
India's total coal imports reached the fastest annual rate of 29 percent in 1515, with concern for coal becoming another major macroeconomic problem, such as oil, with a high volume of imports representing a heavy burden on the current account. Imports of coal have been slowed since then – only in 1818, when imports amounted to 141 million tonnes and were lower than 145 million tonnes in 1995. (Of course, the value of the import value was 1,38,477 crore in FY18 compared to 1,04,507 crore in FY15).
The current state of low stockpile stockpiles coincides with the low-coal scenario at the power plants, with cumulative fuel stocks at production stations that were critical at 10.3 mt as of November 5. This is sufficient to operate the plants in just six days on average. Coal India opened 231 million tons of electricity in H1FY19, which is about 10 percent more than in the year before.
Officials of the CIL attributed the decline in the stock of headbands to increase the availability of rail freight for fuel transportation, which increased supplies. In the first six months of this year, CIL loaded 202 revolutions on average for the electricity sector, which is 9.6 percent more.
Operations on the Tori-Balumath and Jharsugda-Sardeg railway lines, which are crucial for the transportation of coal, also contributed to a reduction in stocks, officials say. –FE
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