Coal crunch for private plants as Maharashtra gives power to Uttar Pradesh

Coal stocks at private thermal power plants in Maharashtra have reached precarious levels as Coal India (CIL), through its subsidiaries, is supplying more fuel to the power plants of Maharashtra State Power Generation Company (Mahagenco). According to industry sources, supply to private power producers has been severely curtailed to make sure supply of more coal to Mahagenco power plants to help them ramp up production to supply to Uttar Pradesh.

Mahagenco, along with Adani Power, DB Power, Jindal Power and others, was awarded a tender to supply power to Uttar Pradesh for April, May and June. Forecasting adequate electricity availability, Uttar Pradesh had cancelled the bids conducted in 2016 to procure 3,800 MW from independent power producers.

As per the tender requirements, Mahagenco is supposed to supply 445 MW in April, 240 MW in May and 450 MW in June to Uttar Pradesh, sources said. To meet the additional supply requirement, Mahagenco needs 20-22 railway rakes of coal from Western Coalfields (WCL), a CIL subsidiary. Sources said that since WCL has no additional allotted railway rakes, it is trimming supply to private power plants to provide more to the Mahagenco plants. WCL is not being able to raise coal production in hot summer months.

According to the latest government data, on May 18, seven power plants of Mahagenco had on an average more than eight days of coal stocks. NTPC’s 2,320 MW Mauda power plant had stock for seven days. Adani’s 3,300 MW Tirora power plant, the largest coal-based station in the state, had fuel reserves for only four days. Apart from Reliance’s 500 MW Dahanu plant, which had coal stock of 26 days, the rest of the private power plants had an average coal stock for a little more than three days. Reliance’s 600 MW Butibori plant and RattanIndia’s 1,350 MW Amaravati plant had reserves for just one day.

In March, thermal power producers received 40.7 million tonne of coal from government coal companies, about 35% more than the amount in September 2016. However, the shortage situation persists in Maharashtra even after private generators, who supply power to the state’s distribution companies, have already paid CIL in advance for supply.

In a letter to coal secretary Susheel Kumar written on February 28, the Association of Power Producers noted that generators face difficulty in long-term production planning due to significant mismatch between the committed schedule and the actual delivery of coal.