The Coal “Crisis”: Ground Reality

Dec 17: The Coal “Crisis”: Ground Reality – https://youtu.be/DaWgsvuEfT8 

TOPIC:

• GS-3: Indian Economy & its challenges
• GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

The Coal “Crisis”: Ground Reality

Context: Coal is the most important and abundant fossil fuel in India. The country’s industrial heritage was built upon indigenous coal.

• Accounts for 55% of the country’s energy need. 
• Hard coal deposit spread over 27 major coalfields are mainly confined to eastern and south central parts of the country. 

In the recent period Coal sector in India has grappled with demand-supply imbalances for a variety of reasons: sharp rise in power demand, supply disruptions caused by extended monsoon and reduction in imports on the back of steep rise in international prices. 

The government has informed the Parliament that there is no shortage of coal in the country and Coal India Ltd has said that it does not foresee any shortage of dry fuel for power producers till March 2022 as it is focusing on ramping up production to secure a stock of about 70 million tonne by end of the current fiscal.

What can probably be the reasons behind the crisis?

• A sharp uptick in power demand as the economy recovers from the Covid-19 pandemic coupled with supply issues have led to the current coal shortage. 
  • India consumed 124 billion units of power in August 2021 compared to 106 billion units of power in August 2019 which was not impacted by the pandemic.
• Coal fired thermal power plants have also supplied a higher proportion of the increase in demand leading the share of thermal power in India’s power mix increasing to 66.4% from 61.9% in 2019.
• The government has connected an additional 28.2 million households and these households are buying lights, fans and television sets leading to an increase in power demand.
• Other key reasons for the supply crunch include continuous rainfall in coal bearing areas in August and September led to lower production and fewer despatches of coal from coal mines. 
• A consistent move to lower imports coupled with high international prices of coal have also led to plants cutting imports.

Measures being taken by Government

• An inter-ministerial team, including representatives of the Power and Railway Ministries, Coal India Ltd, the Central Electricity Authority and Power System Operation Corporation, is monitoring the supply of coal to thermal power plants.
• The government is pressing thermal plants with captive coal mines to boost their coal output so that they can meet more of their own demand 
• Government is also prioritising coal supplies for thermal power plants with low levels of stock. 
• The Power Ministry is also trying to increase the supply of coal by expediting the start of production from a number of mines that already have all requisite clearances in place.
• 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 up from 248 rakes.

Must Read: India’s Coal Usage under Scrutiny

Can you answer the following question?

1. Discuss the significance of coal as an energy resource. What reforms are needed to cure the ailing coal sector.
2. Coal sector reforms will make eastern and central India pillars of development. Discuss.