Domestic coal supply could fall by 21 million tons from April to June due to logistics problems

According to Argus, the Indian Ministry of Energy expects a domestic coal shortage of 21 million tons from April to June due to logistical hurdles; Therefore, they need to develop a distribution strategy to meet peak summer demand.

Domestic coal shipments from the government-controlled Coal India (CIL), Singareni Collieries (SCCL) and captive blocks are expected to be about 201 million for the quarter ended March 24. Argus checked the letter. The potential imbalance between supply and demand exists, although authorities have taken precautions to ensure utilities have sufficient supplies of coal to meet summer electricity demands.

According to the Ministry of Energy, the expected shortfall is “due to limitations in rail logistics”. The need for sufficient transportation infrastructure, such as railway links or smooth roads, to move coal from mines located mainly in rural areas of the country has been a significant obstacle in India’s efforts to increase domestic coal production and supply. Railroad rake availability often decreases during the peak summer season, affecting resupply and power generation.

Several Indian utilities are already in the market looking for pre-monsoon cargoes following the government’s recent coal blending guidance, improving the prospects for India’s thermal coal imports in the coming months. According to the shipping agency GAC, India’s thermal coal imports rose by 3.79 million tons year-on-year to 10.95 million tons in February.

The Electricity Department said it has instructed state governments to prepare to address potential coal shortages to maintain an uninterrupted power supply.

distributive justice

The ministry explained that available domestic coal from CIL and SCCL would be allocated to Indian generators “fairly and transparently” via railway rakes. The allocation mechanism will take into account the ratio of the utilities’ average fortnightly generation of electricity.

The policy comes into effect on April 1st.

All coal-based coal-fired power plants, which account for about 20% of India’s installed generating capacity, are excluded from the program as they do not source coal via railroad cars. It will also exclude all coal-fired power plants that receive coal on the road, which accounts for about 3% of India’s total generating capacity. Most of India’s coal-fired utilities are located far from the mines; As such, they largely rely on existing coal transportation infrastructure and the availability of railroad screens.

According to the Department of Energy, it would reduce the availability of rakes for state-owned producers that sell large volumes of domestic coal electricity to power exchanges. It has been said that excess electricity from a state’s generators should be available to other electric utilities to meet the country’s electricity needs.

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