Coal in India has been booby- trapped since 1774, and India is the second largest patron and consumer of coal after China, mining 716 million metric tons in 2018 and consisting of coal inventories that produce over 40% of energy in India.
The consumption of coal in India in 2019-20 was 942.63 million metric tons alone, out of which 72.93 was based on domestic production.
With the rate at which coal is being consumed, India just might be at the point of a power extremity.
An Unprecedented Energy Crisis
With further than 50% of India’s electricity force counting on coal, it has been lately reported that 54 coal shops with a total generation capacity of MW were either formerly out of coal or on the verge of prostration.
Domestic directors of coal are unfit to meet the rise in demand despite India having the fourth largest reserves in the world.
What makes it indeed more laborious is the fact that importing coal has also come hard because transnational coal prices have hit record highs due to the increase in global demand.
Beget Of This Sudden Crisis
India’s artificial power demand has surged after the alternate coronavirus epidemic swell owing to which directors of coal are scuffling with this swell.
A widening price gap between lower domestic prices and record global coal prices has led buyers to show down senses.
There was a steep rise in power consumption, that is, it rose by 17% in the last 2 months in comparison with the same period of time in 2019.
There was a 40% rise in global coal prices whereas India’s senses fell to a 2-year low.
India’s consumption of power alone in August 2021 is 124 billion units which is 18% higher than what was consumed in August 2019 when the country wasn’t in the grip of the epidemic.
There was a gradual decline in other sources of electricity generation like hydropower, gas and nuclear.
Another major reason for the insufficiency in coal is continuous rainfall during the Monsoon, that is, August to September, in areas containing coal which led to a very low production of coal and very few despatches of coal from coal mines.
Read More: What Is The Global Minimum Tax And What Does It Mean For India
Why Is There A Wide Gap In The Price Between Domestic And Global Coal?
Coal India which is an Indian government-owned coal mining and refining corporation is responsible for deciding the domestic coal prices in India. An increase in price of coal has a cumulative effect on the prices of power and affectation.
The prices have been steadily kept by Coal India over the last few years despite global coal prices rising acutely within the same timeframe. According to the company’s Chairman, the prices will be increased by the miners, however when the change will take place is still blurry.
Meanwhile, coal price marks of Asia have hit record highs in present circumstances, owing to global demand for generation of power as husbandries open up.
Current Stock Levels Of Coal In India
According to Government data from 6th October 2021, out of India’s 135 coal-fired power plants,
- Only 50 power plants have 4-10 days worth of stock left.
- 72 power plants have more that 3 days worth of stock left
- 13 projects have just 10 days worth of stock left
Over the last four years, in comparison with recent data, the average coal inventory that was possessed by the power plants contained only 18 days worth of supply.
Impact Of Coal Shortage In India
According to India’s Power Minister Raj Kumar, the energy supply crunch could last as long as six months.
Owing to the onset of the festive season in India this month, power consumption might reach its pinnacle leading to a rise in demand of power. The situation could be aggravated if there is a substantial increase in global demand for Indian exports.
Still, a swell in the cost of electricity will be felt by consumers, If the extremity continues. The effect on retail will be much more impactful as there is a rise in cost of everything – from oil to food.
How Can This Be Fixed?
To ramp up the production of coal, tenants of captive mines will be required to pay additional premiums to state governments above the ones paid for coal that they sell after meeting their own requirements.
This will boost them to push for more production beyond their own requirements.
There needs to be a balance between India’s urge to comply with the demand for electricity and the impulse to reduce its dependency on coal burning power plants that are hugely toxic and heavily polluting.
Crisis like this can be averted by using an amalgamation of coal and clean sources of energy and most importantly by better planning.
Image Sources: Google Images
Sources: The Hindu, BBC News, Times of India
Find the Blogger: @Rishita51265603
This post is tagged under shortage of coal, power crisis, India is the second largest coal producer, unprecedented energy crisis, surge in industrial power demand, price gap between domestic and global coal, monsoon, surge in electricity cost, amalgamation of coal and clean sources of energy
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