Why is the country on the brink of a Power crisis?

Why is the country on the brink of a Power crisis?

Despite India being the 2nd largest Importer, consumer & producer of coal. Then Why is the India on the brink of a Power crisis?

Unprecedented energy crisis

With more than 50% of India's electricity supply relying on coal, it was recently reported that 54 coal plants with a total generation capacity of 67,405 MW were either already out of coal or on the verge of exhausting.

A never seen before scenario

Power consumption rose by 17% in the last 2 months, compared to the same period in 2019

Global coal prices increased by around 40%

India's imports fell to a 2-year low

Countries like China are buying coal more aggressively

Demand & supply mismatch

▪ Increase in economic activities following the pandemic and monsoon rains which impact coal production have led to the shortages.

▪ Surge in global coal prices & freight costs made Indian power companies turn towards domestic coal producers, adding pressure on them to ramp up the output.

Current stock level 

What is the likely impact?

 Rise in the prices of electricity for the consumers

The manufacturing sector - cement, steel, construction, that rely heavily on electricity will get impacted by a coal shortage.

Dependence on electricity

The share of coal-based power in the electricity mix has risen to 66.4% from 61.9% in 2019

Consumption of Electricity by Sectors during 2019-20(P)

How can this be fixed?

To ramp up the production of coal, lessees of captive mines will be required to pay additional premiums to state governments above the ones paid for coal that they sell after meeting their own requirements.

This will boost them to push for more production beyond their own requirements

What's the Power Minister says about this crisis?

New Delhi: Officials of Power Ministry, BSES, and Tata Power reach the residence of Union Power Minister RK Singh for a meeting over coal shortage at power plants 

Delhi is being supplied the required amount of electricity and it will continue: Union Power Minister RK Singh after chairing a meeting with Ministry of Power and discoms 

The panic ensued after GAIL sent informed Bawana gas power plant that it will stop supplying gas after 2 days because their contract was about to expire. I've asked GAIL CMD, who participated in today's meeting, to continue required supplies: 

I have asked the GAIL CMD to continue supplying the required amount of gas to power stations across the country. He has assured me that the supplies will continue. Neither there was any shortage of gas in the past, nor will it happen in the future

In effect, neither there was, nor there is any crisis. It was created unnecessarily. I've warned Tata Power CEO of action if they send baseless SMSs to customers that can create panic. Messages by GAIL & Tata Power qualify as acts of irresponsible behaviour