Coal: Leap in production, improved dispatches to stave off possible fuel shortages in 2022

While coal supplies have stabilised in recent times, efforts are on to further improve the fuel dispatches and a top government official said power plants are now receiving slightly more coal compared to their requirements.

Coal Secretary Anil Kumar Jain said the increase in coal output would be on account of more production from Coal India Ltd (CIL), captive coal blocks auctioned between 2015-2020 and commercial mines put on sale last year.

?"Next year (FY 2022-23), we are expecting a sizeable leap in coal production," Jain told PTI in an interview.

?In the last financial year, CIL dug out about 596 million tonnes (MT) of coal, he said, adding that in the ongoing fiscal, the output is likely to be upped to 640 MT.

?"Next (financial year), we are hoping that they (CIL) produce around 680 MT. So, between this year and next year, we expect an increase of 40 million tonnes," he said.

?The captive coal mines that were put on sale post cancellation of blocks by the Supreme Court produced 63 MT last fiscal. In the current financial year, their production is likely to be scaled up to 90 MT.

?According to the secretary, captive coal blocks are expected to produce 120 MT in the next financial year.

?Further, he said "40 MT (from Coal India) plus 30 MT (from captive blocks) is 70 MT. In a country which produces about 750 MT, this increase in production is about 10 per cent. So, normally the demand rises by 5 per cent each year. So, we would be producing about 10 per cent more coal."

?"We have 70 MT more coal. The country's power demand rises by 5 per cent, then... 10 per cent (more coal) becomes an adequate cushion," Jain pointed out.

?CIL accounts for over 80 per cent of the domestic coal production.

?About the road ahead, the secretary said in FY'20, an amount of Rs 15,000 crore was sanctioned for rapid loading systems and Coal Handling Plants (CHPs) for 35 largest mines of CIL.

?"In 2022-23, we expect most of these CHPs to get finished. So, not only will it improve efficiency, it will also lead to less pollution, less trucking, less pilferage. This is another development I see happening," Jain said.

?Regarding the unprecedented coal shortages during this year, the secretary said when the second COVID wave hit the country, there was a slowdown in the economy.

?The lifting of coal, in spite of being in abundance, did not happen fully as the power producers may have thought that electricity demand this time, like in the first wave of the pandemic, will remain moderate. So, in the crucial months of April, May and June, the stocking of coal did not happen, he explained.

?"So suddenly when there was a rise in demand (of coal) during monsoons, there wasn't enough stock available," he said, adding that the quantity of the dry fuel being supplied now is "little more than their (power sector's) requirement".

?In October, many states complained about shortage of coal for power plants and some of them also faced electricity outages for several hours a day. The situation had also triggered a political blame game.

?Reasons such as excessive rainfall, international price rise, COVID-19 pandemic, less production and transportation issues, including freight rates, and high consumption were cited as the reasons for the coal shortage.

?Jain pointed out that the first and second waves of COVID had hit coal production, dispatch of the fossil fuel and the manpower working in this segment.

?With the new COVID variant posing a threat, he said, "For Omicron (situation), we are better prepared. We are one of the largest providers of oxygen plants especially at the district and sub-district levels... This time, we are better prepared and people are vaccinated."