Coal Crisis

ECONOMY/ GOVERNANCE

• 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.

Coal Crisis

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

• 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 sufficient for up to two days of generation.
• In total, plants with a power generation capacity of 132 Gigawatts (1GW is 1,000 MW) of the 165 GW of capacity monitored daily, had critical or super critical levels of coal stock.
• The shortage of coal is more acute in non-pithead plants or plants which are not located close to coal mines with such plants accounting for 98 of the 108 plants seen to have critical levels of stock i.e under eight days. 
• India’s coal fired thermal power plants account for 208.8 GW or 54 per cent of India’s 388 GW installed generation capacity.
• Government has said that while the supply crunch has not yet led to any power cuts in the country, the coal supply situation is likely to be “uncomfortable” for up to six months.

What is the reason behind India’s coal shortage?

• 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.

What measures is the government taking to address the situation?

• 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. 

Connecting the dots:

• Reforms in Coal Sector
• Commercial Coal Mining