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Low Coal Stocks in Power Plants, Bump on Entire Value Chain

Electricity in India hugely depends on thermal power plants and generation is bound to take a hit due shortage in coal supply. Decrease in generation will adversely impact the entire value chain. With coal mining auctions underway CIL’s monopoly will end and the supply scenario should improve but Govt needs to take care of the number of rail rakes so that supply is uninterrupted.

Govt also needs to be stringent with power plants to stock the required amount of coal. For a hassle free process, DISCOM’s need to pay the agreed amount to the developers on time so that they don’t have funding issues to stock coal and for DISCOM’s to pay on time, they need to reduce their AT&C losses and state Govt’s need to honor the PPA’s and credit the agreed subsidies on time.