KOLKATA (miningweekly.com) – The Indian Power Ministry has issued directives to its counterparts in the Coal Ministry and Indian Railways (IR) to give the highest priority to dry fuel supplies to pithead thermal power plants, in light of a trend of lower coal dispatching from Coal India Limited (CIL) and an expected summer spike in electricity demand.

The Power Ministry wants State-run coal miners and IR to ensure priority volume supplies and availability of wagons on a priority basis, irrespective of volumes contracted between pithead-based thermal power plant operators and miners.

According to government information, on February 5, eight pithead-based thermal power plants had coal stocks for ten days consumption equivalent, while four had received coal as per their annual contractual agreements.

Between April 1, 2018, and February 4, 2019, CIL had supplied 407-million tons of coal to all thermal power plants across the country, up 7.3% over the corresponding previous period, while IR was able to load 252 rakes a day, up 13% on the previous period.

While at the aggregate level, both coal supplies and transport recorded positive growth, the Power Ministry is concerned about the falling trend in coal dispatch during the months of December and January.

During December, CIL was able to supply 52.8-million tons of fuel to thermal power plants, down 1.2% over the corresponding month of previous year, while coal supply in January was pegged at 52.4-million tons, down 2.3% on the corresponding month of the previous year.

This prompted thermal power companies to increasingly resort to imports with inward shipment during December estimated at 5.5-million tons, up 15% from a year earlier. According to published industry reports, Indian coal imports during 2018 had been estimated at 172-million tons, recording a growth of 19% - the fastest over the past four years.

According to Power Ministry officials, the prospect of improving production growth ahead of the summer months is slim and hence the focus on propping up distribution of domestic coal by reducing logistical bottlenecks. It has pointed out that the rising dependency on imported coal needs to be checked as higher priced imported fuel ultimately have to be passed to consumers through higher electricity tariffs, which, in turn, will be politically inadvisable with Indian national elections just a few months ahead, the officials add.