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Coal India ramps up supplies to address shortage at utilities

·2-min read
A local woman prepares to carry coal at an open coal field at Dhanbad district in Jharkhand

By Sudarshan Varadhan

CHENNAI (Reuters) - State-run Coal India Ltd has ramped up supply of coal over the last five days to address a coal shortage at utilities across the country, the federal coal ministry said on Tuesday.

Coal-fired power accounts for more than 70% of India's electricity generation, with state-run Coal India Ltd accounting for more than four-fifths of its total production.

Government data showed over half of the 135 coal-fired power plants had less than a week's stock of coal left, of which 50 plants had less than three days of coal left. Six plants had run out of coal, data from the Central Electricity Authority showed.

"Coal India Limited (CIL) has stepped up its coal supplies vigorously during the last five days of August 2021 consistently clocking 1.7 million tonnes per day," the coal ministry said.

That is 4.3% higher than the July average of 1.63 million tonnes a day.

A shortage of coal has been exacerbated by a steep growth in power demand in India, as states have eased coronavirus-related curbs, while hydro-electricity generation has fallen.

Federal guidelines recommend utilities have at least two weeks of coal stocks. Only a sixth of thermal power plants had less than a week's stock at the beginning of the month.

At the beginning of the financial year in April, Coal India and power plants across the country had record inventory levels.

Coal shortages occur periodically in India, with the last such shortage occurring in 2017.

While officials have in the past blamed each other and power producers for not buying adequate coal in advance, power producers say a lack of accountability affects utilities.

"Coal shortage is a perennial problem as there is no accountability for short supply or non-availability of rakes," Ashok Khurana, director general of the Association of Power Producers, told Reuters.

India's federal coal and power ministry have asked Coal India to prioritize supplies to thermal power plants with low stock and dispatch fuel from mines with abundant inventory to address the shortage.

(Reporting by Sudarshan Varadhan; Editing by Edmund Blair)