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Explaining: Why is coal shortage choking thermal power plants?

India's thermal power plants are facing a severe coal shortage. What is the reason for this, and how severe is the situation? What measures are being taken by the government?

India’s thermal power plants are facing a severe coal shortage, with coal stocks having come down to an average of four days of fuel across an increasing number of thermal stations. Union Power Minister R K Singh has said that while the supply crunch has not yet led to any power cuts in the country, the coal supply situation is likely to be “uncomfortable” for up to six months.

The Indian Express examines the reasons behind the coal shortage at India’s thermal power plants.

What is the extent of the coal shortage that thermal power plants are facing?

The average level of coal stocks at an increasing number of India’s thermal power plants have come down to four days worth of stock compared to the government recommendations that thermal power plants hold 14 days worth of coal stock. On October 4, 16 thermal power plants with a power generation capacity of 17,475 MW (mega watts) had zero days of coal stock. An additional 45 thermal power plants with a power generation capacity of 59,790 MW had coal stock only sufficient for up to two days of generation.

In total, plants with a power generation capacity of 132 Gigawatts (1GW is 1,000 MW) of the 165 GW of capacity monitored daily, had critical or super critical levels of coal stock. The shortage of coal is more acute in non-pithead plants or plants which are not located close to coal mines with such plants accounting for 98 of the 108 plants seen to have critical levels of stock i.e under eight days. India’s coal fired thermal power plants account for 208.8 GW or 54 per cent of India’s 388 GW installed generation capacity.

What is the reason behind India’s coal shortage?

A sharp uptick in power demand as the economy recovers from the Covid-19 pandemic coupled with supply issues have led to the current coal shortage. India consumed 124 billion units of power in August 2021 compared to 106 billion units of power in August 2019 which was not impacted by the pandemic.

Coal fired thermal power plants have also supplied a higher proportion of the increase in demand leading the share of thermal power in India’s power mix increasing to 66.4% from 61.9% in 2019.

Singh said the government has connected an additional 28.2 million households and these households are buying lights, fans and television sets leading to an increase in power demand. “We touched 200 Gigawatts during the Covid period, and the demand has been hovering around 170-180 GW. I expect it to go up again to near about 200GW, and stay there,” Singh told The Indian Express in an interview.

The trend for higher daily demand is still continuing with total demand for power in the country hitting 174 GW on October 4, up 15 GW from the same day in 2020.

Other key reasons for the supply crunch include lower than normal stock accumulation by thermal power plants in the April-June period and continuous rainfall in coal bearing areas in August and September which led to lower production and fewer despatches of coal from coal mines. A consistent move to lower imports coupled with high international prices of coal have also led to plants cutting imports.

What measures is the government taking to address the situation?

An inter-ministerial team, including representatives of the Power and Railway Ministries, Coal India Ltd, the Central Electricity Authority and Power System Operation Corporation, is monitoring the supply of coal to thermal power plants.

The government is pressing thermal plants with captive coal mines to boost their coal output so that they can meet more of their own demand and is also prioritising coal supplies for thermal power plants with low levels of stock. The Power Ministry is also trying to increase the supply of coal by expediting the start of production from a number of mines that already have all requisite clearances in place.

“Somewhere, the clearances are available, the bidding for MDOs (Mine Developer and Operator) etc is (going on). Where the clearance and land is available that can be expedited. Where the clearances are pending, I have taken up with the environment ministry,” Singh said.

The government has also boosted the number of rakes of coal being transported to thermal power plants daily with 263 rakes of coal dispatched from coal mines on Monday up from 248 rakes on Sunday. “It is expected that the despatches from coal lines will increase further,” the government said in a release.

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