Coal stocking norms for power plants

Subject – Economy

Context – Coal stocking norms for power plants to be eased to avert crisis

Concept –

India has decided to simplify its coal stocking regulations for thermal power plants, mandating them to maintain fuel inventories based on a specified plant load factor to avert the annual crisis the country faces during peak electricity demand seasons.
At present, the regulations are based on the last seven-day average coal consumption. Pithead plants have to maintain 15 days’ stock while for other generators, this can go up to 30 days depending on the distance between the plant and the coal supplying mine. The government is also considering reducing these categories and the number of days for stock requirement.
The current rules are seen as defective because in case power demand rises suddenly and more coal is consumed, a plant would see its stock deplete fast and run out of coal before the supply is replenished.

The new norms will be based on plant load factor, which means the stock has to be delivered for the plant to be operated at a certain level of capacity.
- This will ensure the power plants maintain the mandated coal inventories.
In case the power demand is less, the stocking requirement would still remain the same.
The stocking rules of the CEA were last modified in 2017.
The proposal is aimed at simplifying the calculation and eliminating chances of manipulation and complacency on the part of power project operators. A higher requirement would increase their working capital costs.
Power companies welcomed the proposal to revise coal stocking guidelines.