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India faces electricity crisis as coal supplies run critically low

Taimoor Khan

Jan 20, 2016
United Kingdom

India faces electricity crisis as coal supplies run critically low
Eight in 10 thermal power stations within days of running out as state blackouts spark protests
Hannah Ellis-Petersen in Delhi
Tue 12 Oct 2021 09.54 EDT

India is facing a looming power crisis, as stocks of coal in power plants have fallen to unprecedentedly low levels and states are warning of power blackouts.
States across India have issued panicked warnings that coal supplies to thermal power plants, which convert heat from coal to electricity, are running perilously low.
China orders coalmines to raise production to address power crunch
According to data from the Central Electricity Authority of India, nearly 80% of the country’s coal-fired plants were in the critical, or “supercritical” stage, meaning their stocks could run out in less than five days.

Over the weekend, Delhi’s chief minister, Arvind Kejriwal, wrote to the prime minister, Narendra Modi, that the capital “could face a blackout” if power stations did not receive more coal.

States including Rajasthan, Jharkhand and Bihar have been experiencing power cuts lasting up to 14 hours.
Maharashtra shut down 13 thermal power plants and urged people to use electricity sparingly, and in Punjab three power plants halted production.
Scheduled power cuts introduced in Punjab, lasting up to six hours at a time, have prompted protests.
However, experts have emphasised that the power issues are not due to a shortage of domestic coal production, as some have reported.
Over the past two decades, domestic coal production in India has continued to rise exponentially, though there was a minor dip in production of less than 1% from 2019 to 2020 due to the pandemic.

Energy providers and India’s state-owned coal producer, Coal India Limited, have instead been accused of failing to stockpile sufficient amounts to meet the predicted rise in demand.
“The current crisis is not manifested by shortage of coal mining capacity, but instead it is caused due to improper foresight, planning and stocking of coal by power generators and energy regulator in the country,” said Sunil Dahiya, an analyst at the Centre for Research on Energy and Clean Air.
This year’s heavy monsoon rains have also been blamed for affecting domestic coal mining due to flooding and impeding the dispatch of coal from the mines.

While this is no different from every year, more coal is usually imported to bridge the gap in production. But due to a global energy crisis, which has seen international prices hit record highs, it has been more of a financial challenge to import more coal, leading to greater shortages than usual.
On Tuesday the government asked power producers to import up to 10% of their necessary coal stocks and warned states that federal companies will curb their power supplies if they are found selling electricity on power exchanges to cash in on surging prices.
Vibhuti Garg, lead India economist for the Institute for Energy Economics and Financial Analysis, said that there had been a significant growth in electricity demand recently, as India had re-emerged from the Covid lockdown, but added that this had been anticipated months ago, so should not have taken power companies by surprise.

“Various stakeholders are to be blamed for the situation,” said Garg, who described the situation as “scary but likely to get better soon”.
“Developers were playing safe, thinking that there was a high chance of another Covid wave hitting around this time of the year which would suppress demand. So they didn’t do enough to stock coal at their end.
“So, while there was availability of coal in the last few months, developers were not maintaining enough stock at their end, leading to a crisis situation now.”
Garg said that over the past year “renewable energy installation also slowed down” and that, if the Indian government had focused on increasing the capacity of renewables such as solar, wind and hydro, “the increased demand could have been met through renewable energy and this crisis could have been averted”.

Seeking to allay fears around the power shortages, India’s minister for power, RK Singh, said that “panic has been unnecessarily created about coal shortages”.
Coal minister Pralhad Joshi blamed heavy rains and the high price of international coal for disrupting supply but insisted that in “another three to four days, things will be alright”.
However, there are concerns that the shortages will be used by to justify pushing more domestic coal production, with some state governments already putting on the pressure for expedited clearance for new coalmines in protected areas.
India already has plans to boost its domestic coal production to 1bn tons by 2024.
“The situation is used by few stakeholders to push forward more opening up of coalmines citing the reason as low coal availability but that’s not true at all,” said Dahiya.

Any further expansion will mostly affect India’s tribal communities who live in the forests which cover India’s largest coal reserves, and who have already born the brunt of the environmental damage of coal mining.
If India is to meet its climate targets in the coming years, the country will also need to wean itself off coal, which currently powers almost 70% of its electricity.
“I think the government is using this as an opportunity to push for more coal mining or coal-based power generation,” said Garg. “But we should avoid investing money in assets which will become stranded.
“Coal based generation is expensive and the prices will further increase. On the other hand, renewable energy generation is cheap and prices are likely to go down further.”

Hakikat ve Hikmet

Nov 14, 2015
United States
United States
Pak needs to fully develop the coal mining at Thar. Along with hydro and nuclear they cover the base usage level. At the advent of EVs the base level is supposed to increase at an exponential rate....
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Jul 2, 2014
India faces a crisis as power shortage worsens
Coal shortages are getting critical and coal-fired power stations provide about 70% of India's electricity


Indian coal loaders take a rest at a Bharat Coking Coal Limited open cast mine in Dhanbad in the eastern Indian state of Jharkhand. The country's coal-fired power stations are facing shortages. Photo: AFP
JAIPUR – State after state in India has been reporting power outages as the second most populous nation in the world is facing a huge energy crisis. If some urgent and appropriate steps are not taken by the Narendra Modi government, many states could have blackouts.
Many political analysts say this is the second time the Modi government has failed to handle a crisis adequately. During the second wave of Covid-19 from April to June, the country was marred by a shortage of oxygen, and now a shortage of coal supplies has started to hit the thermal power plants that produce electricity.
Coal makes up about 70% of India’s electricity mix.

Although India’s Ministry of Coal has tried to reassure the public that there is ample stock, no one is buying their statement.

In a recent press statement, the Ministry of Coal tried to reassure the public that ample coal was available in the country to meet the demand of power plants. Any fears of a disruption in the power supply were entirely misplaced, it said.

“The coal stock at power plant end is about 72 (7.2 million) Lakh tonnes, sufficient for 4 days requirement, and that the Coal India Limited (CIL) end is more than 400 Lakh (40 million) tonnes, which is being supplied to the power plants,” the ministry said in the statement.

The ministry also said that domestic coal-based power generation had grown by almost 24% this year, until September 2021, based on a robust supply from coal companies. The daily average coal requirement at the power plants is about 1.85 million tonnes per day, whereas the daily coal supply has been about 1.75 million tonnes per day.

Due to an extended monsoon season, supplies have been constrained.

Laborers collect coal at an open mine in Dhanbad in the eastern Indian state of Jharkhand. Photo: AFP
The coal available at power plants is a rolling stock that gets replenished by supplies from companies daily. Therefore, any fear of coal stocks depleting at the power plant end is erroneous, the ministry said. This year, domestic coal supply has substituted imports by a substantial measure, it added.

However, the situation on the ground is not what the ministry claims – in fact, it’s the opposite.

In India, of the 135 power plants that are dependent on coal for electricity, more than 70 are reported to be facing a crisis. According to media reports, 20 have already shut and more will follow in the next few days if coal is not made available.

The situation has become so bad that some states – like the national capital Delhi, Rajasthan, Punjab, Kerala, Maharashtra, Uttar Pradesh, Madhya Pradesh, Jharkhand, Andhra Pradesh and Tamil Nadu, to name a few – have already resorted to electricity cuts or are on the verge of announcing massive cuts in the electricity supply.

Arvind Kejriwal, the chief minister of Delhi, said on Twitter: “Delhi could face a power crisis. I am personally keeping a close watch over the situation. We are trying our best to avoid it. In the meanwhile, I wrote a letter to the prime minister seeking his intervention.”

“I draw your attention to the prevailing coal shortage situation that is continuing since August/September 21 for the third month in a row, which has affected the power generation from the major Central Generating plans supplying power to NCT of Delhi,” he said in his letter to the PM.

“If the situation continues unabated, it would severely impact the power supply situation in Delhi,” Kejriwal added.

However, Delhi’s Power Minister fired back.

“There is no coal power plant in Delhi. We buy electricity from coal plants situated in other states. NTPC capped the production capacity of all its plants to half. There can be two reasons, first coal shortage or secondly center has told them to do it,” Delhi Power Minister Satyendar Jain reportedly told ANI, an Indian news agency.


Smog in Kolkata in 2019, much of it from coal-fired power plants. Photo: AFP / Indranil Aditya / NurPhoto
NTPC, or the National Thermal Power Corporation Limited, a public sector undertaking, is India’s largest energy conglomerate.

According to media reports, a large number of thermal power stations are within days of running out of coal.

Professor Arun Kumar, the Malcolm Adiseshiah Chair Professor at the Institute of Social Sciences and a retired Professor of Economics at Jawaharlal Nehru University (JNU), said about 66% of the electricity in India is supplied by thermal power plants using coal.

“Reports suggest a shortage of coal at the power plants. This is impacting the availability of power in the country with some reports suggesting that there may be blackouts. This will impact both productions if there are power cuts and prices as energy is a basic input,” Arun Kumar said.

He added that the main factors underlying the surge in demand for electricity and the crisis in the coal supply is that imports of coal have been impacted due to the pandemic, mines possibly slowed production due to lockdowns and it was likely that heavy rain has disrupted both production and supply.

Kumar noted that the country had also seen a shift to thermal power, whose share has risen from 62% to 68% recently. So the demand for coal had risen sharply, and the mines were not ready to supply this sudden surge.

However, some experts blamed the Modi government for the crisis and said the government was not prepared to tackle this kind of problem. “They did not see it coming. Bad planning is a small word – it is a blunder. They also did not keep enough stocks of coal, which there earlier used to be,” said an energy expert on the condition of anonymity.

Raghuvendra Mirdha, a Congress leader and a former trader in Glencore, one of the world’s largest globally diversified natural resources and commodity trading companies, said: “Yes, there is a power crisis in the country. We all should show frugality in terms of electricity consumption.

“However, the business of coal imports and its blending, its procurement by power departments in respective states and grid management – this all needs deep scrutiny.”

Ajay Data, ASSOCHAM Chair (Rajasthan State Development Council), said: “Electricity is like oxygen for industry and a very important resource for today’s life. The crisis of power has to be dealt with in the utmost care. Dialogue with industry leaders and trade chambers is necessary.”

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) is a non-governmental trade association and advocacy group.

“This kind of dialogue must have been done at least 15 days back, but still it is not too late to start it on a daily basis and then plan the power cuts so that industry suffers minimal (damage),” Data said.

“If industry suffers it will hit the top line, bottom line and create unemployment in the entire country,” he added.

Echoing similar views was Professor Arun Kumar, who said the surge in energy prices and the shortage of power would impact production and demand and slow the economic recovery.

“More importantly, the poor who are already hit will be further hit due to loss of employment and a decline in purchasing power.”


An Indian fire-fighter cools hot coal at a stockyard at a coal-fired thermal power plant belonging to Essar Power in Salaya, some 400km from Ahmedabad. Photo: AFP / Sam Panthaky
According to the Centre for Monitoring Indian Economy (CMIE), a leading business information company, the unemployment rate in India now stands at 7% – 8% in urban areas and 6.5% in rural areas. This is quite high and if the energy crisis deepens this is bound to go up.

And mind you, it is not only the industrial sector which will be hit, but agriculture and domestic consumers will also be badly affected. In India, sowing the Rabi crops, or winter crops, starts from November, and if the situation does not improve it would be difficult for farmers to water their fields.

Domestic consumers would also face problems as this is festival time in India and the festival of lights – Diwali – is on November 4. During this festival, which usually lasts for five days, people illuminate the interior and exterior of their homes.

There have also been concerns by intellectuals and the media that the entire issue of coal availability and power shortages should be not be used as an excuse to privatize the power sector. The Indian government has advocated the monetization of national assets in the recent past.


Jul 1, 2021
Why is there sudden coal shortage? Similar reports are also coming from China.

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