Coal production hits a new milestone in H1 FY23, coal despatch to power sector rises 17%

• Coal production hit a new milestone of 382 MT in H1 FY23, increasing from 315.7 MT in the same period last year.
  
• Analysts at CareEdge Research estimate that coal production is likely to reach 500 MT in H2 FY23.
  
• Coal despatch to the power sector rose 17% due to an increase in demand for electricity during April and May 2022.
  

Coal production has hit a new milestone of 382 million tonnes (MT) in the first half of FY23, according to data from the Ministry of Coal, increasing from 315.7 MT in the same period last year.

“This growth was supported by various government initiatives to maintain the coal demand and supply in the country and the contribution of the new commercial mines that became operational in Q1 FY23,” said a report by CareEdge Research.

In the last two years, the Indian government has announced multiple measures to boost coal production and ensure energy security in the backdrop of the global energy crisis triggered by the Russia-Ukraine war. The measures include – incentives for early commencement of coal production, a new commercial coal mining scheme that was launched in 2020 and auction of abandoned coal mines by Coal India.

Coal India contributed 78% of the coal production in H1 FY23, followed by captive mines. Coal India’s production increased 19.7% year-on-year, while that of captive mines increased 49.8%.

The research firm estimates that the total coal production for the year FY23 will reach 882 MT – in line with the government’s 900 MT target.

Coal despatch to the power sector rises 16.7%

Coal despatch to the power sector increased 16.7% in the first half of FY23.

Of the total coal despatch of 416.8 MT in H1 FY23, the power sector and captive power plants combined took a lion’s share of 374.1 MT.

“The demand for electricity from April to May 2022 rose due to the intense summer season, which led to increased supply to the power sector. Overall, rakes available to the power sector in H1FY23 increased by a significant 13% over the same period in FY22,” said the CareEdge Research report.

The report notes that the demand has come down in Q2 as compared to Q1 thanks to the monsoon.

The impact of monsoon on power demand is also visible in the decline in plant load factor (PLF) in Q2 when compared to Q1 – PLF fell from 72.6% in April 2022 to 60.6% in September, according to the report.

PLF, or capacity utilisation, is the proportion of electricity generated compared to the overall installed capacity.

“PLFs have been coming down due to a decline in demand for electricity and low utilisation of coal available at power plants,” the report said.

Coal imports rise

India’s total coal imports increased to 115.9 MT between April and August 2022, from 92.5 MT in the same period last year.

According to the report, prices of the benchmark South African thermal coal have been on an upward trajectory since November 2021. The geopolitical tensions between Russia and Ukraine caused the coal prices to cross $300 per tonne in April 2022, peaking at $329 per tonne in July.

“International coal prices are expected to remain elevated owing to the heightened geopolitical tensions,” the report added.

SEE ALSO:

Mark Zuckerberg is trying to do what Google did with Android — but he learned all the wrong lessons

10 things to know about DCX Systems IPO that opens on October 31

Center extends Sugar export ban till October 31, 2023