As things stand, pan-India coal inventory is enough for nine days, as opposed to the last 10 years' average of 25 days. An uptick in demand is cited one of the reasons behind this power crisis.
India is facing a power crisis, made worse in no small measure by the ongoing Russia-Ukraine War. Of the 12 states affected by the coal shortage, several -- Andhra Pradesh, Maharashtra, Gujarat, Rajasthan, Telangana and Tamil Nadu included -- have resorted to power cuts.
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As things stand, pan-India coal inventory is enough for nine days, as opposed to the last 10 years' average of 25 days. An uptick in demand is cited one of the reasons behind this power crisis. As per experts, Coal India did ramp up its production, but it wasn't sufficient to meet the increased demand.
The Russian invasion of Ukraine worsened the situation for India in terms of power generation. Coal contributes to 77 percent of India's power generation. Of this, over 12 percent is import-based coal. the Russia-Ukraine war led to a disruption in international coal supply, making the coal import much more expensive and affecting India's coal import.
Another source of power which got impacted because of the current geopolitical upheaval is natural gas. "In FY 2021, Natural gas contributed to 4 percent of India's power generation. But this figure dropped by 50 percent in FY 2022. Last fiscal, Natural gas contributed to 2 percent of India's power generation," Sumit Kishore, Executive Director, cap goods, power and infra, Axis Capital, told CNBC TV-18.
India's current coal inventory is 85 million tonnes, the same as in 2017. But the demand increased by 25 percent in 2022 as compared to 2017. Experts say Coal India did ramp up its production, but not at par with current demand. A lack of planning and shortsightedness of stakeholders at every level widened the demand-supply gap. With Tata Power CEO Praveer Sinha claiming that resolution of the Mundra Plant will finally reach a positive conclusion within next 7-10 days, experts say that this will improve the situation in Gujarat by a significant margin. Talking about its impact on the overall situation, experts said a positive outcome will bring at least some, if not drastic, relief.
On Tuesday, Maharashtra Chief Minister Uddhav Thackeray chaired a meeting to review the state's power situation. In an official statement, the Chief Minister's Office said, "Considering the increasing demand for electricity from across the state, CM Uddhav Thackeray directed the implementation of immediate measures to generate 8000 MW of thermal power in his meeting with the Energy Department today."
Maharashtra's Energy Minister Dr Nitin Raut told CNBC TV-18 that regarding Mundra resolution, Maharashtra has agreed to Tata power's tariff demand.
In the meantime, Andhra Pradesh continues to experience huge power cuts.
Experts say that despite all these steps, the country will face power crisis till the onset of monsoon and until there is some drop in temperatures.