New Delhi, Dec 8, 2008 : In a recent letter to Ministry of Coal, the Federation of Indian Chambers of Commerce and Industry has addressed the issue of the proposed rise in coal rakes in the power sector.This will in turn deprive consumers of the Non-Regulated Sector (NRS), of sufficient coal rakes and ultimately lead to a coal crunch. The council highlighted Coal India’s recent decision to increase rake supplies to the power sector to 296 per day.The December 2, 2021 decision was taken to increase coal stocks in power plants to 14 day from the current level of about 10 days.
Coal Ministry’s decision to increase coal rakes in the Power Sector will result in Captive Power Plants being deprived of coal rakes.This will cause coal crunch for industrial manufacturers.
The provision of ‘Priority Coal Supplies to the Power Sector’ in the months August through November led to a difficult situation for the Non-Regulated Sectors (NRS) which adversely affected their operations.The letter also states that 255 of 272 rakes were provided to the power sector in November.
However, the non-power sector received only 17 rakes, which is less than their daily requirement of 50 rakes.The Dec 2021 plan proposes 26 rakes per NRS.
Railway rakes are the main transport channel for coal from point-of-production to point of consumption.The supply of coal for Captive Power Producers (CPPs), and other industries has been significantly reduced or stopped in recent months.
This has resulted in a dangerous situation for other coal-based Power Generators.This has adversely affected their industrial operations.
Discriminatory steps include transferring rakes from CPPs to Power Producers (PP) by giving them a higher priority.
This will result in a shortage of coal for industrial production activities.
This will not bode well for the manufacturing supply chain.If this situation continues, it will create a precarious situation for NRS sector, which is highly power-intensive and could have a negative impact on their industrial operations and, by extension, the economy.
Due to the shortage, NRS consumers will have to procure Grid electricity from Power Sector using coal diverted form NRS.This will cause skyrocketing power prices as well as a power deficit for other consumers.
The situation in the Power Sector has improved to 9 days thanks to the coordinated efforts of Coal India and Ministry of Coal.NRS consumers, on the other hand are having difficulty obtaining un-interrupted coal supplies for continued operations.
Their coal supplies are at 40-50 percent levels, which will directly affect the overall Index of Industrial Production and create a bottleneck in the nation’s GDP growth.The growth of Indian industry is directly tied to the demand for Power Sector.
NRS has played a crucial role in bringing back industrial activity.It has been a catalyst for India’s GDP to grow by 8.4% in Q2-FY22.This is expected to increase to double digits in Q3-FY22.
The NRS, including the DRI- and CPP-based industries, are heavily dependent on uninterrupted coal supplies.This is crucial for sustainable operations and competitiveness of power intensive industries.
FICCI’s state council has asked the ministry for support to normalize coal rakes supply to DRI, Captive Power Plants of Steel, and other Industries.They requested that at least 50 rakes per hour be allocated to non-regulated sectors to ensure optimal materialization and balanced economic development.
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