June 2, 2021 - Coal India Ltd (CIL) saw 55 million tonne (mt) offtake of the fossil fuel, a record, in May due to higher demand from the power sector.

Supplies were 38% higher year-on-year, when electricity demand had dipped during the first wave of the coronavirus pandemic.

India’s power sector is the largest consumer of coal in the country, with CIL being the largest coal miner.

Photo: Bloomberg

India’s power sector is the largest consumer of coal in the country, with CIL being the largest coal miner. Coal-fuelled electricity generation remains the mainstay of India’s power mix.

“Spurred by the revival of coal demand from power sector Coal India Limited (CIL) scripted the highest ever coal off-take of 55 Million Tonnes (MTs) for the month of May so far," the statement added.

Of Coal india's production target of 670 mt for the current financial year, demand from power sector is expected to account for around 545 mt. India’s overall coal requirement is expected to go up to 1,123 mt by 2023 from 700 mt as of now.

Offtake fell in April as the second wave of the pandemic left several contract workers battling the deadly infection as reported by Mint earlier. Fuel offtake from India’s largest coal miner fell to 54.13 mt in April as against a target of 68.89 mt.

“Stimulated by increased activity and higher coal consumption stock at thermal power stations of the country fell by 5 MTs in the month of April’21 from that of 28.9 MTs at the closure of last fiscal. However, increased supplies by CIL in May’21 resulted in the coal stock restored to 29 MTs at the coal fired plants. In the ensuing months the company aims to further increase its supplies," the statement said.

India has the world’s fourth largest coal reserves and is the second-largest producer. With a global shift to green energy to address growing environmental concerns, the Indian government is trying to harness coal reserves within the next three decades.

“As coal supplies surged ahead to 55 MTs in May’21, CIL recorded a whopping 15 MT increase in volume terms against comparable month last year, logging close to 38% growth," the statement added.

India’s peak electricity demand fell during the first wave, with commercial and industrial demand taking a hit after many factories closed. However, domestic consumption, which generates comparatively lower tariffs, went up. With the revival of economic activity, while the demand since then went up, it got impacted again during the second wave.

“With the appetite for coal signalling healthy recovery, CIL’s supply to power sector at nearly 44 MTs in May’21 was up by 41%. The company supplied around 13 MTs more to power plants compared to May’20," the statement said.

India’s power generation capacity has also been increasing. Of a total installed power generation capacity of 382.15 gigawatts (GW), coal-fuelled projects account for 53% or 202.67 GW.

"CIL’s total coal off-take for April-May’21 was 109.2 MTs, clocking a growth of 38% compared to 79 MTs same period year ago. Similarly supply to power sector, the largest coal consuming sector, also registered 38% growth. CIL supplied 86.3 MTs of coal to power during the first two months of the ongoing fiscal compared to 62.7 MTs same period a year ago," the statement said.

Of India’s total electricity demand load pattern, industrial and agricultural consumption account for 41.16% and 17.69%, respectively. Commercial electricity consumption accounts for 8.24%.

"CIL has liquidated 25 MTs of coal out of its inventory during April-May’21. The company which began FY’22 with close to 100 MTs stock at its pitheads reduced it to 74.3 MTs at the end of May’21," the CIL statement said.

With 2.59 lakh employees and 83,000 contractual labourers, Coal India is the largest corporate employer in the country.

"CIL produced 42.1 MTs in May’21 and 84 MTs in April-May’21 period," the statement added.