Industry Associations, Energy News, ET EnergyWorld
Associations include Aluminum Association of India, Coal Consumers Association of India, Confederation of Indian Textile Industry, Indian Electricity Captive Producers Association, Sponge Iron Manufacturers Association and Indian Fertilizer Association.
“While the regular supply of coal rakes to utilities has increased the stock of dry fuel at power plants across the country, it is clear that despite several representations from various industry players as well as associations, the coal supply scenario of the no “electricity sector deteriorated even more. A further reduction in supply by rail as well as road and road with rail (RcR) modes for the past few weeks has plunged the lot of NRS consumers into dire conditions,” they said.
Industries such as aluminum, cement, steel, sponge iron, paper, fertilizer, chemicals, rayon and their Captive Power Plants (CPP) mainly depend on domestic coal for fuel as well as direct feed into the manufacturing process.
This unfavorable supply situation which began around August/September last year became even more difficult as coal inventories at many power stations dipped below critical levels. The supply-demand ratio had shown signs of improvement in November. However, supply to NRS consumers, including CPPs, fell again despite October-March being the highest production months for Coal India Ltd.
“Industries plan their fuel needs well in advance. Therefore, any sudden change in supply commitment from local sources creates a huge impact on plant operations,” the associations explained.
Energy-intensive, continuous processing plants and their captive power plants rely heavily on coal as their primary fuel source. Therefore, the disruption of the fuel supply chain forces many factories to operate at lower capacity and negatively affects their cost of production. A higher cost of production will ultimately affect all sections of society, they said.
“We humbly believe that the Ministry of Coal standard policy (approved by CCEA) can be strongly implemented to ensure a justified ratio of coal allocation between the power sector and industries so that consumers are not not deprived of their legitimate right and can economically continue their production for the delivery of goods at an affordable price to the common people,” they said.
Coal India said on Saturday that it was currently supplying around 3.4 lakh tonnes of coal per day to the non-electric sector, which is the company’s average supply for this segment, and stressed that it had a sufficient buffer stock to increase supply to the sector.