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Business News/ Market / Mark-to-market/  Four out of 10 coal-fired plants operate at less than 60% capacity utilization
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Four out of 10 coal-fired plants operate at less than 60% capacity utilization

Because of poor coal supply and a lack of demand from state discoms, many coal-fired plants are operating at low capacities

Graphic: Prajakta Patil/MintPremium
Graphic: Prajakta Patil/Mint

Coal stocks at one-third of the country’s thermal power plants have fallen to less than a week’s requirement, according to data from the Central Electricity Authority (CEA). That’s just a bad problem which has gotten worse. Because of poor coal supply and a lack of demand from state discoms, which have failed to resolve their financial problems, many coal-fired plants are operating at low capacities.

The plant load factor, or capacity utilization, had fallen to 60.36% in August. For this financial year till August, the number is 65.85%. This problem has hit a significant number of plants (see chart). Four out of 10 coal-fired plants are operating at less than 60% capacity utilization.

Put differently, these plants make up one-third of coal plants by installed capacity. Thus, not only should coal supplies be improved, some action must be taken to improve state discom finances so that they reflect on-the-ground demand.

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Published: 08 Sep 2014, 02:58 PM IST
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