The central coal ministry of the country yesterday gave heads up to all the power plants in the country on the purchase of coal despite lowered demand in the market. It is because of the coronavirus shockwave that even the global demand for coal has declined and India is no exception.
More than three-fourths of the electricity that is generated in India is fired from coal. Anil Kumar Jain, the secretary of India’s Ministry of Coal, had last week written to Sanjiv Nandan Sahai, the top bureaucrat in the power ministry, to ensure that power generators do not cut back intakes of coal from the state-run Coal India Ltd.
“I request the Ministry of Power to prevail upon central gencos, NTPC Ltd and its JVs, state gencos and independent power producers not to restrict intake of coal from Coal India and Singreni Collieries,” Jain said in the April 3 letter, which was seen by Reuters.
According to government data, electricity consumption had slumped 21.3 percent in the first two weeks of the lockdown ended April 7, compared with the first three weeks of March. The utilities’ stocks at mines and miners’ inventories have hit record highs owing to the lowered demand, pushing many power plants to avoid buying more coal, Coal India officials expressed to media. “This is understandable but worrisome,” Jain wrote.
“Worst congestion of routes can be expected once railways start attaching priorities to the movement of people and other essential goods, once the lockdown is lifted,” he added.
India’s central coal ministry has directed the central electricity regulator to provide three months to distribution companies (DISCOMs) in order to make payments to power producers. It is a move that could provide relief to DISCOMs but affect the finances of generating companies which are already reeling due to burgeoning overdue.