The country is facing an acute coal shortage and over 100 coal-based power plants had stock for less than five days as of October 6. However, the supply of coal is expected to improve with the government relaxing its stocking norms.
On October 6, India also witnessed a 7,800 megawatts (MW) peak shortage for electricity. This on a day when 3,800 million units were the demand which was met by the government.
The shortage has also impacted the non-regulated sectors like steel, cement and aluminium as most of the supplies of coal for these plants have been diverted to the power plants.
Even Coal India’s auction prices have skyrocketed and it is becoming a pain for the other sectors due to the shortage of coal for electricity.
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The main reason for the crisis in the country is due to low levels of coal supplies during the monsoon while the power demand increased after the Covid-induced second wave lockdowns.
India’s electricity production declined by 0.7 per cent in September, never mind the improvements in economic activity.
Coal India is the biggest producer of coal in India. Some analysts and power generating companies believe that Coal India’s stockpile started dwindling when the second wave of COVID-19 hit but the impact was seen only in August as demand remained subdued during the second wave.
Unprecedented rains in many coal-bearing areas further hindered production and non-payment of power bills from generation companies and regulation of coal also added further pain.
According to AP reports, the shortages have stoked fears of potential black-outs in parts of India, where 70 per cent of power is generated from coal. Out of India’s 135 coal plants, 108 were facing critically low stocks, with 28 of them down to just one days' worth of supply, according to power ministry data released on Wednesday, the most recently available.
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Watch the accompanying video of CNBC-TV18’s Anshu Sharma for more details.
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