Reversing the trend of the past two years, the number of plants with critical or supercritical coal stocks has reduced to just one (as of March 24, 2019), as indicated by the CEA data. The average stock of 127 plants monitored by the CEA stood at 30 mt, enough to last them 18 days. As of end-March 2018, the number of plants with critical coal stocks stood at 28, with the total coal stock at only about 16 mt for 10 days.
Analysts note that this trend reversal has been the result of a sustained improvement in coal production levels by Coal India Limited, from a production of 54.5 mt in February 2018 to 58 mt in February 2019. Another key factor has been adequate rake availability by Indian Railways. Rake availability to the coal sector in 2018-19 was at an all-time high of 425 rakes per day till February 2019, compared to 387 rakes per day in 2017-18.
On the policy front too, there have been some key announcements related to coal, which are expected to ease coal supply challenges. CIL has announced its plans to hold the third round of auctions for awarding long-term fuel supply contracts under the SHAKTI scheme. The participants of the first round will also be eligible to bid in this round. (The second round of coal auctions, to be held soon, disallows former winners and bidders.) Meanwhile, the cabinet has cleared a slew of amendments to the SHAKTI scheme, including linking coal supply to efficiency, increasing coal allocations in forward auctions and allowing coal linkages for short-term PPAs.
The power sector has seen an upswing in thermal coal imports in the past two years, which increased from 149 mt in 2016-17 to 161 mt in 2017-18. These developments provide a glimmer of hope for the power sector.