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Coal India well placed to meet power sector needs…
What's Buzzing
Coal India (CIL) is geared up to meet the needs of the power sector in Q1FY24 amid concerns over a spike in coal demand.
Context
CIL is confident of supplying 156 million tonnes (MT) of coal to the power sector during April–June 2023. This would be 25.6% of the enhanced annual dispatch target of 610 MT slated for the power sector in FY24.
Our Perspective
CIL has chalked out its supply plan for thermal power plants for the next fiscal year. While setting up its supply plan, the company is fully cognizant of the importance of meeting a demand surge from the power sector and is geared up to meet the needs. For FY24, CIL is planning to supply enhanced 610 MT coal supply target to power sector. The target is 20 MT more than the initially projected 590 MT requirement by the power sector. Of this, the company has chalked out plans to supply 156 MT of coal to power sector during Q1FY24. This would be 25.6% of the enhanced annual dispatch target of 610 MT slated for power sector in FY24. Factors in favour of CIL are a strong 68 MT coal stock build up expected at its pitheads by FY23 end, which as of March 13, 2023 was 57.3 MT. Even after despatching the planned coal to power utilities in the first quarter of FY24, CIL is likely to have a healthy 50 MT coal stock at its pitheads by June 2023 end. Of the total 821 MT domestic coal demand projected for the power sector in FY24, CIL's target alone accounts for ~76% at 610 MT. Even in the current financial year (FY23), the initial target of 565 MT, to thermal plants, was increased to 569.5 MT by the power sector in May 2022. Taking the rejigged target into its stride, CIL as of March 13, 2023, had already clocked 554 MT supply to the power sector. CIL is well on track to close FY23 with ~585 MT despatch to the power sector, which represents an 8.3% jump over 540 MT in FY22.
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