Power sector outstanding dues to coal PSUs up 42% y-o-y in end-FY24

The cumulative outstanding dues of the power sector to Coal India (CIL) and Singareni Collieries Company (SCCL), which account for over 90 per cent of India’s coal production, rose 42 per cent y-o-y to ₹24,392 crore at the end of FY24.

The outstanding dues payable by thermal power plants (TPPs) to the mining behemoth CIL rose 13 per cent y-o-y to ₹15,715 crore in March 2024, while those of SCCL more than doubled on an annual basis last month to ₹8,677 crore. However, on a monthly basis, the total outstanding dues of PSU miners fell 14 per cent from the record ₹28,438.1 crore in February 2024. The dues of CIL and SCCL also fell 13 per cent and 16 per cent m-o-m, respectively.

Rising consumption

In the Q4 FY24, the dues of coal miners have been on the higher side on account of higher requirement of coal as India’s power demand has been growing at around 7 per cent per annum.

For instance, the outstanding dues of TPPs rose 33 per cent to ₹27,228.18 crore in January 2024. Similarly, during February, the dues were even steeper at 40 per cent y-o-y at ₹28,438.10 crore. The dues at the end of February 2024 were at a record level compared to previous years.

Domestic coal consumption by TPPs rose 9 per cent y-o-y to almost 74 million tonnes (mt) in March this year. During January and February as well the consumption rose 7 per cent and 13 per cent on an annual basis to 71.3 mt and 68.4 mt, respectively.

Coal-fired power plants, with an installed capacity of nearly 211 gigawatts (GW), consumed 849.7 million tonnes (mt) of the critical commodity in FY24, which is higher by 9.41 per cent y-o-y from 776.6 mt in FY23.

Production and dispatch also rose in line with rising coal consumption. Coal production in Q4 FY24 rose 7.4 per cent y-o-y to 262.11 mt, while dispatch grew 7 per cent y-o-y to 220.47 mt during the same period.

Power demand

Government and analysts expect power demand to grow at 6-7 per cent y-o-y on the back of rising consumption from industries and households. The peak power demand in FY23 hit 240 GW in September 2023 and projections are that it will hit 260 GW this summer.

Keeping thermal power plants well stocked is critical as the Indian Meteorological Department (IMD) expects extreme heat conditions during April to June with Central and Western India likely to face the worst impact. As of April 19, domestic coal-based power plants had a stock of 46.55 mt against a daily requirement of around 2.7 mt.