Non power consumption of coal

Subject – Economy

Context – Coal’s now only for power and profits

Concept –

State-owned Coal India has asked its subsidiaries not to auction coal, except for the power sector.
“In view of the current low stock position at the powerhouse end, supply of coal is being prioritised to the power sector to replenish the dwindling stock…coal companies are advised to refrain from conducting of any further e-auctions of coal with the exception of special forward e-auction for the power sector, till the situation stabilises,” Coal India said in a recent letter to its arms.
Non-power consumers, which account for about a quarter of India’s total coal consumption, include steel plants, aluminium smelters and cement manufacturers.
Supplies to non-power sectors during the first half of FY22 at little over 62 million tonnes (MT) was 10% higher than last year.
The coal ministry said it is diverting the output from captive coal mines, to augment fuel supply to the power sector.
- Captive mines are those that produce coal or mineral for exclusive use by the company that owns the blocks.
- Mines and Minerals (Development and Regulation) Act, 1957 empowered central to reserve any mine for the particular end-use. These were the captive mines.
- Now, the Mines and Minerals (Development and Regulation) Amendment Bill, 2021 removed the distinction. Now captive mines will also be able to sell their stock.

The profits

Private power producers and some state transmission utilities appear to be making a killing by selling electricity on the exchanges where rates have tripled owing to lower generation as a result of coal shortage.
Data from the power exchanges for October 13 show producers and state transmission companies selling electricity at Rs 16-18 per unit against the usual rate of Rs 4-6 prevalent before the coal shortage hit generation units.