India stares at power crisis: What led to this

An energy crisis is looming in some states, including Delhi and Punjab, due to a combination of factors such as excess rainfall hitting coal movement and imported coal-based power plants generating less than half of their capacity due to record-high rates.

In a year when the country produced record coal, rains hit movement of the fuel from mines to power generation units, impacting power generation in many states, including Gujarat, Punjab, Rajasthan, Delhi and Tamil Nadu.

While power producers and distributors have warned of blackouts as generation units are running with coal stocks of as low as two days, the Coal Ministry said that the country has adequate coal stocks and low inventory does not mean generation will stop as stocks are being continuously replenished.

Another factor that has contributed to the present crisis is power plants that used imported coal to generate electricity, have either curtailed generation or completely stopped as a spurt in international energy prices has made it difficult for them to meet the commitments to states at a particular rate.

Tata Power, which has signed contracts to supply 1,850 MW of electricity to Gujarat, 475 MW to Punjab, 380 MW to Rajasthan, 760 MW to Maharashtra and 380 MW to Haryana from its imported coal-based power plant at Mundra in Gujarat, has stopped generation. Adani Power’s Mundra unit too is facing a similar problem.

Power plants across the country regulated generation after stock ran low. Against the requirement of maintaining 15 days to 30 days of stocks, over half of the country’s 135 coal-fired power plants, which in total supply around 70 per cent of the nation’s electricity, have fuel stocks of less than two days, as per the data from the grid operator.

The Coal Ministry, however, said the stocks being reported by power plants are rolling stock, which means stocks are being replenished on a day by day basis. “There are about 40 million tonnes of coal stock at the mines and another 7.5 million tonnes at power plants,” a top ministry official said. “Evacuation from mines to power plants has been an issue as due to excessive rains mines get flooded. But this is now being sorted out and supplies to power plants are rising.”

Tata Power Distribution Ltd (TPDDL), which supplies electricity to parts of the national capital, on Saturday warned of intermittent rotational power cuts as units supplying electricity to Delhi discoms have coal stocks to meet generation requirements for 1-2 days, its CEO Ganesh Srinivasan said.

Delhi Chief Minister Arvind Kejriwal shot off a letter to Prime Minister Narendra Modi over “a power crisis” Delhi could face. “I am personally keeping a close watch over the situation. We are trying our best to avoid it,” Kejriwal said. “We have stopped generation at Mundra as the high cost of imported coal is making it impossible to supply under present PPA terms,” a Tata power spokesperson said.

Adani Power did not immediately offer any comments on the issue. Electricity supplies in Punjab, Rajasthan, Tamil Nadu, Jharkhand, Bihar and Andhra Pradesh to have been impacted due to the coal crisis. Punjab State Power Corporation Ltd (PSPCL) too cited the same reason for imposing rotational 3-4 hour load shedding at several places in the state. PSPCL said two units each at Talwandi Sabo power plant, Ropar plant and one unit at the Lehra Mohabbat, 475 MW plant have been shut.

Rajasthan is resorting to one-hour power cuts on a daily basis. The Tamil Nadu Generation and Distribution Corporation (Tangedco) said that power will be suspended in parts of Chennai for carrying out maintenance work in the city. Jharkhand and Bihar are also among the worst affected by the coal shortage. In Andhra Pradesh, acute supply shortfalls were pushing it towards unscheduled power cuts, adding that crops could dry up if there is no electricity to power irrigation pumps.

“More water is required in the last stage of harvesting and if it is denied, fields would dry up and farmers stand to lose,” Andhra Pradesh Chief Minister Y.S. Jagan Mohan Reddy said in a letter to the Prime Minister.

In Odisha, the industry was facing a coal shortage and had petitioned the state government to ensure an adequate supply of the fuel. The crisis facing states has been in the making for months. As India’s economy picked up after a deadly second wave of Covid-19, demand for power rose sharply.

Electricity consumption has jumped almost 17 per cent in the last two months alone when compared to the same period in 2019. At the same time, global coal prices increased by 40 per cent and India’s imports fell to a two-year low.

The country is the world’s second-largest importer of coal despite also being home to the fourth-largest coal reserves in the world. Power plants that usually rely on imports are now heavily dependent on Indian coal, adding further pressure to already stretched domestic supplies.