Coal Shortage in India

What is the issue?

India’s thermal power plants are facing a severe coal shortage, with coal stocks having come down to an average of 4 days of fuel across an increasing number of thermal stations.

What is the current status of coal stocks?

Coal fired plants makeup nearly 70% of India’s power source mix.

• On October 4, 16 thermal power plants with a power generation capacity of 17,475 MW (mega watts) had zero days of coal stock.
• An additional 45 thermal power plants with a power generation capacity of 59,790 MW had coal stock only for up to two days.
• It is way below the government recommendations of holding 14 days worth of coal stock.
• The non-pithead plants or plants which are not located close to coal mines have critical levels of stock i.e under 8 days.

What is the reason behind India’s coal shortage?

• Increased power demand - A sharp uptick in power demand as the economy recovers from Covid-19 pandemic coupled with supply issues have led to coal shortage.
• India consumed 124 billion units of power in August 2021 compared to 106 billion units of power in August 2019.
• Supply crunches - Lower than normal stock accumulation by thermal power plants in the April-June period is another reason.
• Continuous rainfall in coal bearing areas in August and September caused fewer despatches of coal from coal mines.
• Fall in imports – There has been sharp fall in imports due to high international prices.
• Non-payments of coal dues - The non-payments of coal dues by States such as Maharashtra, Rajasthan, Tamil Nadu, Uttar Pradesh and Madhya Pradesh also resulted in inadequate supplies.

What will be the impact of coal shortage?

• The electricity shortages could delay India’s economic reopening.
• It might lead to downscaling of business productions.
• India’s population and under developed energy infrastructure will mean the power crisis could hit long and hard.

What measures is the government taking to address the situation?

• The Power Ministry has constituted a Core Management Team to monitor and manage the fuel on daily basis to improve supplies to power plants.
• Coal India, the state-owned miner claims that it has ramped up supplies to thermal power plants by nearly 12 per cent annually.
• The government is pressing thermal plants with captive coal mines to boost their coal output to meet their own demand.
• The Power Ministry is trying to expedite the start of production from a number of mines that already have all requisite clearances.
• The government has also boosted the number of rakes of coal being transported to thermal power plants daily.

What is the way forward?

• State run Coal India and NTPC Ltd. can work together to raise the output from mines.
• India has to ramp its imports despite the financial cost.
• Advance preparation and ensuring sufficient stocks ahead of monsoons is a well known strategy.

Source: The Indian Express, Business Line