Industrial states want to import coal to make up for the shortfall

Summer temperatures are soaring and so is the power demand. Some States have already scheduled planned outages. And we are now told that the power companies face shortage of coal. Industrial states want to import coal to make up for the shortfall. That is a costly proposition beyond the reach of smaller states. Is there a coal crisis? Remember, there was a similar hue and cry a few months ago too. Uttar Pradesh says it is left with only 26 per cent of its coal stock. In Maharashtra, the coal-fired power stations have stocks worth 6.5 lakh metric tonnes whereas 1.4 lakh metric tonnes of is needed for optimal generation. The Madhya Pradesh government says its stocks will barely last 1.5 to 3.5 days.  Stocks in a majority of the thermal plants are reaching the critical mark. The Union government says over 70 million tonnes of coal is at present available with Coal India Limited, Singareni Collieries, Limited, coal washeries, and other. The plants between them have over 20 million tonnes. The railways is chipping in with additional rakes to speed up the transportation of coal. The problem has everything to do with planning issues involving the coal producers and transporters. That is why coal supplies at thermal plants deplete. This needs an immediate remedy for the simple reason that coal-based power production is the mainstay of the country's power sector. 

This March, for instance, 210 gigawatts of the total 396 gigawatts generated in India was from coal-fired plants. That is a 53 per cent share. Those who understand the situation say the problem is a mix of production issues at Coal India and other logistics. The power plants are supposed to store coal upto 15 days and that is built into the tariff. However, for various reasons, including reducing inventory, it is not strictly followed. Previously, power plants were operating at around 70 per cent plant load factor. Now, due to summer and increased industrial activities, the power plants are expected to run at above 95 per cent load factor. The complete revival of economic and manufacturing activities after the Covid restrictions were lifted has also added to the growing power demand.  Freebies such a promising free power only adds to the burden. The problem is how to bridge this gap between the load factors. The agreement with Coal India is for supply of coal that is calculated on the basis of 85 per cent load factor. The usual practice is for the gap to be filled by imported coal. The National Thermal Power Corporation, which produces nearly a quarter of India's total power output, has plans to import a record 16 million tonnes of coal to blend with domestic coal in the current fiscal.  But the import rates are very high. The NTPC has also started coal mining in Odisha and Jharkhand. Stocks are being sought from whichever private mines are operable. It is a wait and watch situation for now.