Coal India Limited Eases Coal Supply Restrictions for Power Plants

In a move to boost its coal sales volume, Coal India Limited (CIL) has relaxed restrictions on coal supplies to thermal power plants, including independent power plants (IPPs). Previously, CIL allowed supplies up to 120% of the Annual Contracted Quantity (ACQ) to power plants with fuel supply agreements (FSA) containing such a provision. This new policy eliminates the 120% cap, empowering power plants to lift higher quantities of coal beyond their stipulated ACQ.

The relaxation is expected to benefit power plants seeking to increase their coal consumption while also providing a boost to CIL’s coal supplies at a time when demand is showing signs of slowing down. This policy change aligns with CIL’s efforts to streamline its operations and improve the ease of doing business.

To meet the rising demand for coal, CIL’s pitheads have maintained a substantial coal stock, reaching 72 million tonnes (MTs) as of June 2024, a 47% increase compared to the previous year. In fiscal year 2024, CIL’s coal supplies to coal-fired power plants peaked at an unprecedented 619.7 MTs, surpassing the projected demand by 1.6%. This represents a significant increase of 31.9 MTs compared to the previous year, translating to a growth rate of 5.4%.

CIL has long-term linkages with 127 out of 153 domestic coal-based power plants, accounting for a total of 592 MTs. Additionally, the company has linkages with 50 out of 54 domestic coal-based IPPs, supplying 155.7 MT/per annum. In fiscal year 2024, domestic coal-based power plants generated 1177 billion units (BU), with approximately 78% of the generation fueled by CIL’s coal sources at 915 BU.

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