India’s thermal power plants are currently grappling with a severe coal shortage. Coal stocks have plunged to an alarming average of four days worth of fuel, affecting an increasing number of thermal stations. This article delves into the key reasons for this dire situation and its potential implications.
Why is there a Coal Shortage?
The primary factor causing the coal shortage is the eruption in power demand. As India’s economy recovers from the Covid-19 pandemic, the demand for electricity has skyrocketed. Concurrently, supply issues have exacerbated the problem. The country is bearing the brunt of a squeeze on domestic mine output, a surge in electricity demand, and soaring prices of seaborne coal.
A significant increase in the share of thermal power plants has also contributed to the crisis. These plants have supplied a higher proportion of the increased demand, raising the share of thermal power in India’s power mix to 66.4% from 61.9% in 2019.
The Impact of Flooding and Reduced Imports
Factors such as abnormal rainfall and a deliberate reduction in imports have further deepened the crisis. Lower than usual stock accumulation by thermal power plants during April-June, along with continuous rainfall in coal-bearing areas in August and September, led to reduced production and fewer dispatches from coal mines.
Additionally, government efforts to reduce imports coupled with high international coal prices have led to plants trimming imports.
Implications of the Coal Shortage
If industries experience electricity shortages, it can potentially delay India’s economic reopening. Some businesses may even consider downsizing production. Given India’s population and underdeveloped energy infrastructure, the power crisis could have long-lasting impacts.
Possible Solutions to Address the Crisis
There are several steps the Indian government can take to effectively combat the situation. These include ramping up mining, controlling supply, increasing imports, and turning to new power sources.
The government is eyeing measures like closely monitoring stocks and raising output from mines to boost supply. For this purpose, state-run Coal India and NTPC are working to raise output from mines.
Hydro-Power Generation and Natural Gas as Alternatives
The heavy monsoon rains that flooded coal mines are likely to enhance hydro-power generation. Large hydro-electric projects on dams — India’s major electricity source after coal — perform at their peak during the rainy season, which typically extends from June to October.
Natural gas could also play a larger role, despite the global price surge. In a desperate situation, the gas-powered fleet could help prevent widespread power outages. State-run generator NTPC Ltd., for example, has idle capacity that can be activated in around 30 minutes if needed and is connected to a gas grid.
Coal: A Vital Resource
Coal is the most abundant fossil fuel and serves as a domestic fuel in industries such as iron and steel and steam engines, and for generating electricity or thermal power. The coal we use today was formed millions of years ago when giant ferns and swamps got buried under layers of earth, earning it the nickname “Buried Sunshine”. The world’s leading coal producers include China, the US, Australia, Indonesia, and India, with India’s main coal producing areas being Raniganj, Jharia, Dhanbad and Bokaro in Jharkhand.
