Non-power consumers face risk of closure due to coal supply shortage


By Express News Service

NEW DELHI:  The coal shortage situation in the country is yet to ease. While power companies are still looking for alternative options to secure their coal stock, non-power consumers continue to reel under severe dearth of coal.

Though the power sector accounts for around 66% of coal consumption in India, other sectors are also likely to be impacted badly as coal supply to non-power consumers has come to a halt. In a letter to the secretary, Ministry of Coal, the non-power consumers have again raised the issue of complete disruption of coal to sectors like aluminum, steel, cement, sponge iron, chemical, paper, etc.

“The non-power sector consumers including captive power plants (CPP), aluminum, steel, cement, sponge iron, chemical, paper etc, have long been facing an acute shortage of coal as supply via rail mode was halted from most of the CIL Subsidiaries. This situation has further worsened as supply to the non-power consumers has been completely halted via road mode as well,” says the letter from Coal Consumers’ Association of India.

It further says that the coal companies have also refrained from conducting any further e-auctions of coal, where the non-power sector can participate. The letter also pointed out that the lack of fuel at the plant-end is forcing many non-power consumers to stall their operations while several others are on the verge of closure. Rising coal prices and high ocean freight rates are also not helping sectors that use coal as primary fuel. Imports have become unviable and hence dependence on domestic coal has increased. In the past six months, coal prices have trebled in the international market.

A report by Nomura says that the impact of coal shortages will likely be felt well beyond the power sector. “Anecdotal evidence suggests non-power sectors will likely bear the brunt, especially iron, steel, and oil refineries (which use captive power plants). How long these emergency measures last will crucially determine the impact on the non-power sectors,” says the report.

Other major consumers of coal are the sponge iron industry with a 7% share, followed by cement (1%). 
As on 21 October, 104 out of 135 power plants in the country were running on coal supply of less than 6 days or less.

Running out of fuel
As on 21 October, 104 out of 135 power plants in the country were running on coal supply of less than 6 days or less. The situation has forced the NTPC to look for importing coal.


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