NEW DELHI: Reflecting the sharp hit that India’s power sector took during the peak of the national lockdown in April and the slow recovery of demand in the following months, data from the country’s largest coal producer shows that its despatches to the power sector dived nearly 20 per cent during the April-July period of this year.
Coal India accounts for over 80 per cent of domestic coal output and power plants consume a substantial portion of this. During the period under review, coal despatches fell to 126.30 million tonnes (MT) compared to 156.86 MT of fuel in April- July last year, according to data from the coal ministry.
In July 2020, coal despatch from CIL fell 12.4 per cent to 32.76 MT, from 37.41 MT supply in the corresponding month of the previous fiscal year. In fact, India’s power output clawed itself back into year-on-year growth territory only in the first fortnight of this month since the lockdown was announced in March.
The amount of energy met by India’s power suppliers rose to 54,990 million units (MU) — around 1.6 per cent higher than the 54,092 MU generated during the same period of the previous year. This, after a 14.3 per cent fall in May, a 9.9 per cent decline in June and a 1.8 per cent decline in July.
However, while demand is rising, this trend is likely to remain muted as the economy settles into a slower band of GDP growth for the next few quarters.
According to ratings agency India Ratings, demand for domestic coal is "likely to be subdued in the second quarter of the current financial year due to lower demand from end-user industries... along with high inventory at power stations".
It had also noted that domestic coal production has remained subdued for the third consecutive month in June 2020. But offtake, which also fell on year-on-year terms, improved monthon- month due to the gradual relaxation in lockdown norms.