From the Editor’s Desk

India gears up for summer, with adequate measures in place by the government to ramp up coal supplies and increase the share of renewables in India’s energy mix, enabling the country to fight the power shortage challenges. CIL has also increased its supply considerably to meet the power crisis issues.

This year India's power utilities are likely to increase domestic coal procurement to cope with surges in demand, keeping in mind the situation that was created last year by extreme temperatures and accordingly coal transportation to the generators had been immediately prioritized both by the coal ministry as well as the Railways.

Looking at the significant increase in power demand, the Ministry of Power recently asked all the coal-powered utilities to blend 6 % imported coal and has invoked Section 11 of the Electricity Act, 2003. According to the act, all imported coal-based (ICB) power plants have been directed to run at full capacity allowing plants to supply on priority to holders of power purchase agreements (PPAs).

Coal in India is anticipated to have a buoyant future as domestic coal production has been steady throughout the fiscal with a consistent rise in energy demand. On the other hand, industrial sectors, including cement and metal companies, are also hopeful that the proactive steps initiated by the government will not let coal be an issue this summer.

All subsidiaries of CIL have registered growth over the previous year and the growth rate is likely to remain stable in the coming days. Another positive development in the power sector is that coal stock positions at power stations look better than the levels seen a year ago.

Coal despatch from captive blocks to different sectors witnessed more than a 30% increase this year compared to the year before.Earlier the government had allowed 100 % FDI in commercial mining and permitted single window clearance for the seamless functioning of mines while captive mines have been permitted to sell up to 50% of their annual production after meeting the requirement of the end-use plants.

In the face of ramping up coal supply, to make business smooth for consumers, a significant measure known as the single window mode agnostic e-auction has been facilitated with an aim to improve operational efficiencies in the domestic coal market. The NRS Linkage auction starting with the sponge iron subsector began on Feb 9th, 2023 after a span of three years to allocate coal to the various industry sectors and captive power sectors on a long-term basis.

The array of initiatives by the Government is likely to ensure a smooth supply of coal to the power sector and avert an acute power crisis when the temperature peaks like last summer. Along with the steps taken to ensure consistent coal supply to the utilities the Government has also increased despatch of coal to the industries both via road and rail mode. It remains to be seen in terms of rake movement whether the proactive measures taken in this regard yield positive results for the industries as well.

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