With the onset of peak summer, state-run coal producer Coal india has beefed up efforts to increase coal supply to power houses. In fiscal year 2019-20, the state-run miner plans to supply 530 million tonne of coal to the power sector, a 8.6 per cent rise over the previous year.
Supply to the power sector during 2018-19 was 488 million tonne, a rise of 7.5 per cent over the previous year. However, the annual production targets for the current fiscal have not been finalised yet.
Retaining the focus on power sector, CIL’s share of deispatches to power companies has increased to 80 per cent in FY19 from the level of 78 per cent during the previous two years.
CIL’s subsidiary Northern Coalfields Limited (NCL) has already increased its coal production to realise plans to supply more coal to power houses. The company produced 8.92 million tonnes of coal in April 2019 against a production of 7.96 million tonnes during the same period in last fiscal.
In the same month, NCL also supplied five per cent more coal (at 6.73 million tonnes) than what was supplied last year. Overall, it has been assigned to supply 92.80 million tonnes of coal to power houses this fiscal against a supply of 88.50 million tonnes in FY19. It has also been assigned a coal production and dispatch target of 106.50 million tonnes each for the financial year 2019-20.
However, coal still seems to be losing its shine on the back of a fundamental change in electricity market dynamics driven by competition from cheaper renewable energy sources. A look at the annual addition of thermal power capacity shows that in 2018-19 the country added only a fourth of the capacity it did in fiscal year 2015-16.
Capacity addition for fiscal year 2018-19 also fell short of the target (set at 7,266 MW) by a good 20 per cent. On the other hand, wind and solar power plants generated far more power than earlier, producing 59 billion and 35 billion units of electricity in the first 11 months of 2018-19, compared with 50 billion and 22 billion units in the corresponding period of the previous year.