Worst is over in India's power crisis, says govt as states complain of massive coal shortage

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After initially denying reports of nationwide coal shortage, the Central Government on Tuesday said that the worst of India's coal crisis is over, acknowledging that the country indeed had come to the brink of power outages.

Quoting government sources, The Times of India reported that the government has made plans to increase supplies to two million tonnes a day over the next few days and railways has also been asked to provide more rakes to supply fuel to power plants.

"The worst is over as stocks are rising for the last four days. With enhanced supply, the situation is expected to be normal in a month or so," the source told TOI.

About two-thirds of the coal-fired power plants had stockpiles of a week or less but the coal ministry said, "any fear of disruption in the power supply is entirely misplaced."

The PMO, or Prime Minister's Office, reviewed the situation and discussed solutions.

Which states will face power outages?

Notwithstanding the Centre's efforts, several states have reportedly been mulling power outages after the festive season, while a few others are already seeing hours of unscheduled load shedding to manage demand deficits. The shortage of coal -- which makes up around 70 percent of India's electricity mix €" has forced rotational power cuts in states from Rajasthan to Kerala. States have been forced to buy power from exchanges at high rates to meet demand.

In >Punjab, power cuts of 3-9 hours in a day continued for the fourth day in a row, on Tuesday, while >Haryana, in contrast, claimed to have enough stocks to run its power plants. In >Andhra Pradesh, directions to implement power cuts from (19 October) Saturday led to a rush among people to buy inverters as traders jacked up its prices by nearly 30 percent. Load shedding has already started in >Andhra's Kurnool and Dasara districts. Bangalore Electricity Supply Company Limited (BESCOM) has announced that a number of areas in >Bengaluru will face power outages today scheduled in different batches for a duration of two-plus hours each.

Kerala has decided to hold off making a decision till after 19 October but the state is facing a shortage of 100 MW each day.

What are the reasons for power cuts, especially in Punjab?

In Punjab, as industries continued to suffer due to unscheduled power cuts, the coal stocks in the state remained critically low. Cuts lasted for even six hours in some parts of the state. More power cuts are in the offing in the evening too.

The shortage is a result of the scarcity of coal. Whether this is due to a supply chain issue or problems with stockpile is not clear in the midst of allegations and counter-allegations between the Centre and the Opposition-ruled state.

According to reports, Punjab is facing an acute coal crisis with stocks available to run its five thermal plants fast depleting. At the three private plants, the available stocks are not expected to last more than two days.

According to The Times of India, the Nabha Power Limited, Rajpura, plant has 2.3 days coal stock, Talwandi Sabo Power Limited in Mansa district's Banawala village has a stock of 1.7 days and GVK 1.3 days, while the state-run power plant in Ropar has 3.2 days stock and the one at Lehra Mohabbat has stock for 2.6 days.

Punjab is currently facing a shortage of over 1,000 megawatts of power every day. This has forced PSPCL to purchase power from the open market at exorbitant rates.

Last Friday, PSPCL had to purchase 131 lakh units from the grid at a whopping rate of Rs 13.52 per unit. It has already finalised purchase of 1,200 MW for the month of October for prices ranging between Rs 7 and Rs 14.

What's the government doing about this?

To defuse the crisis, the Union power ministry has issued instructions ranging from asking states not to sell power at high prices on the exchange to ordering state electricity generators to ensure adequate supplies.

State-owned Coal India Ltd (CIL) has been asked to augment the coal supply to power producers to 1.55-1.6 million tonnes per day this week and to further scale it up to 1.7 million tonnes daily after 20 October.

In addition, guidelines have also been issued regarding utilisation of unallocated power, to meet the increased demand from coal-based power generation.

Under these guidelines, the states have been requested to use the unallocated power for supplying electricity to the consumers of the state; and in case of surplus power, the states are requested to intimate Centre so that this power can be reallocated to other needy states. Further, if any state is found selling power in power exchange or not scheduling this unallocated power, their unallocated power may be temporarily reduced or withdrawn and reallocated to other States which are in need of such power.

The government is also ready to neglect large pending payments to Coal India and has promised to maintain supplies notwithstanding outstading bills. States have huge pending dues of Coal India on them. It is learnt from sources that Maharashtra, Rajasthan, Madhya Pradesh, Karnataka, West Bengal and Tamil Nadu are big defaulters. All States have to dues of Rs 20,000 crores to be paid to Coal India. Government sources said despite large sums of dues, supply continues and it will continue to provide power and coal supplies.

Why is India facing a massive coal shortage?

There are multiple reasons for the current scenario. A government source told ANI, "Since January coal ministry has been writing to various states to pick up and stock coal in their respective states but no one paid heed. Coal India can stock up to a limit. If we stock more coal than the limit there is a risk of fire."

Rajasthan, West Bengal, Jharkhand have their own mines but they did little to extract coal. It is learnt that despite clearances some of the state governments sat on decisions and gave COVID and rains as a reason for not doing enough mining, as per ANI.

Prolonged monsoon affected the mining and the shooting prices of imported coal also contributed to the current situation. There is a 12 percent fall in imports of foreign coal which power companies blend, to cut losses due to high prices they also shifted to domestic coal.

Electrification of villages and industrialisation has also shot up the demand. A government source told ANI that Delhi and Punjab shut coal plants like in Ropar and Bhatinda.

Additionally, the government has asked thermal power units to restart the discontinued practice of blending 10% imported coal on concerns over depleting stock, while the coal and power ministries will explore ways to further enhance supplies, sources told The Economic Times after high-profile deliberations on Tuesday.

Also See: Coal crisis: Centre warns states against selling share of unallocated power at a higher rate

'Absolute baseless': Finance minister Nirmala Sitharaman rubbishes reports of coal shortage in India

PMO reviews coal supply, power availability situation to defuse energy crisis faced by several states

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