Coal Shortage can lead to energy crisis in India


Shortage of coal is becoming a major problem. India’s power plants are running with shortage of coal and they have very less stock left. More than 70 percent of India’s energy comes from thermal power. There are total 135 thermal power plants and 67 percent of them only have four days of coal supplies left in stock.

 Let’s analyze how we came to this situation –

– The demand for electricity is rising because economic activities are resuming in the country. During lockdown major economic activities were closed. But now gradually everything is again starting. The power demand has increased from previous year. Now in August 2021 energy demand is 17% high than Pre-Covid August 2019.

– In international market coal price has increased. That’s why there is a sharp fall on import of coal. Indian buyers had stopped importing coal and started relying mostly on domestic stock. This reason domestic stock has reduced to its lowest level. India exports coal from Indonesia but they have increased the prices  

– Heavy rain in coal mining areas like Jharkhand, Orissa and Chhattisgarh has increased the problem. It led to lower dispatches during the period.

India imports coal from Indonesia, Australia and South Africa. The price of coal in Indonesia has surged more than two hundred percent since March. Coal India had warned previously to the Power Ministry that there is a potential crisis in coal supply. They advised to the power plants to make a stock before monsoon starts. Majority of power plants haven’t adhered to the guideline of Coal India, which said to maintain a minimum stock of twenty-two days.

As a result of this reduced production of electricity, Industries are facing power shortage. It will hamper production and business activities. Delhi chief minister Arvind Kejriwal have sought Prime Minister’s intervention in this area. Coal based power stations which is supplying electricity in Delhi have very low stock of coal left in their inventory. For this reason, in coming days Delhi might go through intermittent rotational load shedding.

After the pandemic Indian economy is recovering very fast. Any power cuts to the industry will damage India’s economic recovery and industrial production. India’s power producers have to increase domestic coal purchases, as well as imports from other countries. Keeping in mind these hurdles, India should focus on renewable energy sources. It will be better for environment and mankind.

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Debraj Chatterjee
Debraj Chatterjee
9 months ago

great article