Increase in demand, revival of economy causing coal shortage: Centre

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Increase in demand, revival of economy causing coal shortage: Centre
Increase in demand, revival of economy causing coal shortage: Centre

10 Oct 2021: Increase in demand, revival of economy causing coal shortage: Centre

Amid warnings of a power crisis due to coal shortage, the Centre said on Saturday that an increase in demand for electricity due to the revival of the economy is leading to the depletion of coal stocks at power plants. Citing three other reasons for the coal shortage, the Centre assured the situation would be "alright" in the next few days.

Details: What are the four reasons cited by the Centre?

The Centre listed four reasons that have led to the coal crisis. These include: -An unprecedented increase in demand for electricity due to the revival of the economy. -Heavy rains in coal mine areas in September, which affected both the production and the dispatch of coal. -Increase in prices of imported coal. -Legacy issues of heavy dues of coal companies from certain states.

Economy: Power consumption for August-September increased

The Centre said power consumption for August-September has "progressively increased from 106.6 BU (billion units) per month in 2019 (normal non-COVID year) to 124.2 BU per month in 2021." Underlining the growing dependence on coal, it said, "The daily consumption of electricity has crossed beyond 4 billion units per day and 65-70% of the demand is being met by coal-fired power generation."

Imports: Increase in prices of imported coal added to crisis

The Centre said the increase in imported coal prices has also led to a surge in demand for domestic coal. Notably, the price of imported Indonesian coal jumped from $60/ton in March 2021 to $160/ton in September-October. Compared to 2019, there's been a 43.6% reduction in power generation from imported coal, resulting in extra demand of 17.4MT of domestic coal during April-September, it said.

Ministry: Coal Ministry to increase dispatch to 1.6 MT/day

In its statement, the Centre said an inter-ministerial sub-group led by the Coal Ministry has been monitoring the coal stock situation twice a week. It also said the Ministry is putting efforts to increase coal dispatch to the power sector to 1.6 million tonnes (MT) per day in the next three days. The same will be 1.7 MT per day thereafter, the Ministry added.

Fact: Power Minister constituted core team to manage coal stock

The Power Minister also established a Core Management Team (CMT) on August 27 to manage coal stocks and ensure equitable management. The CMT is reportedly monitoring the situation daily and working with Coal India Limited and the Indian Railways to improve supply to power plants.

Quote: 'Things will be alright in next 3-4 days'

Further, Union Coal Minister Pralhad Joshi said that heavy rainfall in the country this year has added to the coal shortage. "If you compare with the past many years, coal production and dispatch have been the highest in September and especially in October," the Minister said. "In another three to four days, things will be alright," he added.

Recent news: Several states raised concerns about the shortage

The issue of coal shortage in power plants has been flagged by several states, including Gujarat, Punjab, Rajasthan, Delhi, Andhra Pradesh, and Tamil Nadu. Delhi CM Arvind Kejriwal wrote to PM Narendra Modi, stating the national capital "could face a blackout" in the next two days. Andhra Pradesh CM Jagan Mohan Reddy also wrote to the Prime Minister, describing the situation as "quite alarming."

The news article, Increase in demand, revival of economy causing coal shortage: Centre appeared first on NewsBytes.

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