New Delhi | Jagran News Desk: Ahead of the festive season, India is facing a severe shortage of coal on the domestic front. The extent of the shortage is such that the Central Electricity Authority (CEA) in its latest report on coal stock said that 64 non-pithead power plants in the country are left with less than four days of the dry fuel stocks. While Coal India, the country's largest coal producer has announced to increase supply to meet the domestic demands, the demand by Indian utilities facing a shortage of coal could not be met in a short time unless coal is imported.
Why India is facing a coal crunch?
- COVID-19 Pandemic:
The Covid-19 pandemic plays an important role in the coal crunch the country is facing right now. After the second wave of the deadly virus in the country, India's industrial power consumption witnessed a dramatic rise with power demand rising by 13.2 per cent during the first eight months of 2021. The rise in demand is contrary to the previous year when the power demand declined to its lowest in the last three decades due to the lockdown imposed in the country.
As per a report by Reuters, Coal India, with an aim to meet the increased demand, supplied about 243 million tonnes of coal to power companies from April 1 to September 28. The supply, the Reuters report said, is 28 per cent higher than the supply in the same period in 2020 and 11 per cent higher than the supply in April-September in 2019.
- Monsoon Rains in coal-bearing areas:
Every year, Coal India asks utilities to stock up before the beginning of the monsoon season when rains make transport and output of raw materials difficult. Despite this, many coal firms could not stock up sufficiently due to domestic supply on the shorter side and the imported coal being at a record high. According to the Ministry of Power, there was continuous rain in the coal-bearing areas in August and September 2021, leading to lower despatch from coal mines in this period. The rains caused logistic woes and led to many companies, especially on the coastal line, which run primarily on the imported coal, to curtail production or shut down their operation.
- Soaring coal prices in the international market due to China's energy crisis:
The coal crunch is not just limited to India, but China, which is the world's largest producer and consumer of coal, is also facing a severe shortage. Several media reports have also stated that China has even imposed restrictions on power usage in houses and shops. With a shortage at its door, China has restricted the export of coal and is striving for imported coal in the international market. The restrictions by China on coal export has led to a significant rise in prices in the international market burdening those who largely depend on coal imports.
As per the data by the Central Electricity Authority (CEA), in August 2021, the coal firms in India imported only 1.9 million tonnes of coal, which is a whopping 42 per cent decline from the previous year's imports in the same month, which means that Indian coal firms are not buying coal from the international market and due to the crunch in domestic supply, many are left with no option but to reduce their productions.
How the Government is planning to combat the coal crunch:
According to a report in PTI last month, Coal India has informally discussed the matter with board members and most of them have acknowledged the need to hike the prices of coal. The state-run firm raised coal prices by at least 10-11 per cent, which would be the first hike in dry fuel since 2018. The current regulated price realisation of coal is Rs 1,394 per tonne. Coal India is awaiting the government's nod, following which it will take the final call.
The government has also boosted the number of rakes of coal being transported to thermal power plants daily with 263 rakes of coal dispatched from coal mines on Monday up from 248 rakes on Sunday. On October 4, 2021, the total number of rakes dispatched was 263, which is 15 rakes more than the rakes dispatched on October 3, 2021, the ministry said in a statement.
To manage the coal stock and ensure equitable distribution of coal, the Ministry of Power constituted a Core Management Team (CMT) on August 27, 2021, comprising of representatives from the Ministry of Power, CEA (central electricity authority), POSOCO (Power System Operation Corporation), Railways and Coal India Ltd (CIL) to ensure daily monitoring of the coal stocks and despatches. The CMT is closely monitoring and managing the coal stocks on daily basis and ensuring follow up actions with Coal India and Railways to improve the coal supply to power plants, it stated.
Posted By: Talibuddin Khan