There’s a power crisis brewing in the country. Several coal-powered plants in India are now running out of steam and if the supply gap isn’t plugged quickly we may have to deal with a whole host of problems. According to one article in the Economic Times, the average coal stock held by Indian coal-fired plants seem to have dwindled to the lowest in three years. Nearly 100 of the 135 plants had less than seven days worth of buffer coal stock as of Sept 13, when guidelines mandate plants to hold at least two weeks supply.
WHY IS IT SO MASSIVE?
India relies heavily on thermal power plants for its electricity needs and therefore coal remains as the major fuel behind India’s electricity supply. It is the second largest importer, consumer and producer of coal, and has the world’s fourth largest reserves. It mainly imports from Indonesia, Australia and South Africa. The shortages of coal have stoked fears of potential black-outs in parts of India, where 70% of power is generated from coal. Experts say the crunch could upset renewed efforts to ramp up manufacturing.
As economies open up in the rest of the world, the demand for importing power-generation fuels, such as coal, has risen. Similarly in India, the power consumption in August jumped by nearly 20 percent from the same month in 2019, before the pandemic struck, the power ministry said.
India is facing two challenges- soaring electricity demand as manufacturing and business rebounds after Covid-19 curbs were lifted and a fall in local coal output.
Nobody expected economic growth to revive like this and for energy demand to shoot up so quickly, said Vibhuti Garg, an energy economist at the Institute for Energy Economics and Financial Analysis.
FURTHER IMPACT
The crisis is likely to cost inflation, industry experts say. They say that the electricity shortage could result in retail inflation, affection prices of oil to food.
What government says?
India’s coal secretary, Anil Kumar Jain stated that currently, deliveries to power plants are short by between 60,000 and 80,000 tonnes a day.
This added burden (due to a decreasing dependence on imported coal) is despite the fact that production of coal in India in the six-month period of April to September 2021 has increased to 315 MT from 282 MT last year same period, showing an increase of almost 12 percent.
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