Mumbai: Crisil Rating warned that despite the respite from a temporary fall in power demand, a tenth of the thermal capacity is still vulnerable to the outage as it sees coal-stock remaining in single-digit days through the rest of the year.
Recently, the agency had said the ongoing coal shortage could debilitate corporate India if it lingers on for long.
About 10 per cent of the 209 GW, to be precise 20 GW capacity of coal-based private power stations remain vulnerable to outage amid surging coal demand. Despite the recent dip in demand (10 per cent over October 16 and 17) due to heavy rains, coal shortage persists as their inventory is only for 5 days, the report said.
Over half of these capacities do not have fuel supply agreements, which increases their reliance on coal, either through imports or through e-auction where prices remain elevated, both these may force these plants to shutter operations for a few days as their operating cost may outweigh revenue.
Coal shortage is acute despite domestic supply rising 16 per cent in Q2FY22 over the same period in the pre-pandemic FY20, partly due to substitute non-coking coal imports falling over 20 per cent and depleted coal stock at the plants. Another problem is the erratic domestic supplies due to seasonal rains impacting mining. Overall coal supply grew around 8 per cent.
Meanwhile, domestic e-auction premia have jumped over 130 per cent over the Coal India notified rate in September, from 80 per cent in September 2019 due to the supply shortage.
Even global coal prices are 160 per cent up over September 2019 rates due to growing energy demand across the globe, constraints in production, and high natural gas prices skewing the energy mix.
The agency expects high global coal prices and the domestic e-auction premia to remain elevated till supplies stabilise, which will lead to 20 GW of private capacities from the overall 209 GW of coal-based capacities to be hit and forcing them to down shutters for a few days to shore up coal stock and to avoid heavy operating losses.
However, outages are unlikely at Central and state gencos accounting for 133 GW because most of them have fuel supply agreements for their entire requirement, which guarantee coal supplies at notified prices. These plants cater to over 60 per cent of thermal generation.
The balance 56 GW of the private gencos have more than half of their coal requirements tied up.
As much as 80 per cent of the coal domestically produced is supplied to gencos, which generate 75 per cent of the power, the demand for which grew 9 per cent in Q2 over the same period in the pre-pandemic level.
The problem also rose because the reliance on thermal sources increased disproportionately because of lower hydro and nuclear generation during the period.
Thermal plant load factors have expanded by 400 bps to 57 per cent in Q2 FY22 from 53 per cent in the same quarter FY20 and are expected to remain high at 60 per cent for the full fiscal as against 56 per cent in FY20. As a result, the pressure on coal demand will also remain high….AGENCIES