India has released a new framework that is expected to bring down the cost of electricity while helping the discoms planning to purchase power in advance. Overall, the move is expected to benefit power generating companies and bring down some burden of electricity cost on the consumers.
According to a Reuters report, over half of India's 135 coal-powered power plants are left with less than three days of stock, contradicting the government's assurances that there is enough power.
The report added India's power shortfall in the first week of October was 21 times more than the deficit in the same period in 2020. And, over four times more than the deficit recorded in 2019. Before now, power shortages have been largely restricted to Jammu and Kashmir.
Indian states suffer power cuts as coal shortage worsens
India's north Indian states have suffered electricity cuts and may continue to face shortages because of a lack of coal, Reuters reported. States of Jharkhand, Bihar, and Rajasthan were among the worst affected, the report mentioned. The industrial states like Gujarat and Haryana have also been through some shortages this week as did some parts of Uttar Pradesh, the state expecting elections soon.
Coal shortage: Government gets into action
China orders coal mines to increase production
China, suffering from an acute shortage of energy, has ordered its coal mines to ramp up production to ease the crisis and balance power demand with its efforts to tackle the climate crisis. Inner Mongolia, which is China's second-largest coal-producing province, has ordered its 72 mines to boost production by nearly 100 million metric tons. The order was to take effect immediately, a CNN report said.
C. Market snapshot
Norbert Rücker of Julius Baer said the risks in natural gas markets are disproportionately priced. "The turmoil on natural gas markets raises questions. Indeed, the higher prices send a correct message to ration demand and raise supply, but we cannot ignore that the ferocious dynamics likely include a fair share of sentiment excesses. Indeed, things could get worse with a cold winter, but things could also improve with a mild winter. We consider the risks to be disproportionally priced," he said in a note.