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Business News/ Opinion / Online-views/  Coal shortages, once again

Coal shortages, once again

CEA data showed at the end of September, 35 thermal power plants had less than a week's supply of coal left

Photo: MintPremium
Photo: Mint

Thermal power plants reaching a “critical" level—a euphemism for coal stocks being sufficient for less than a week—is nothing new in India. But if reports are to be believed, some 65,000 megawatts (MW) of power generation capacity is not being utilized because of a shortage of coal.

Central Electricity Authority (CEA) data showed that at the end of September, 35 thermal power plants had less than a week’s supply of coal left. Of the 65,000 MW of stranded capacity, the public sector NTPC alone accounts for nearly 15,000 MW.

All this is happening at a time when states are reeling from power shortages. To give one example, Tamil Nadu chief minister J. Jayalalithaa has written to the Prime Minister asking that surrendered power from Delhi be routed to her state. Tamil Nadu faces a demand-supply gap of 4,000 MW, the highest in the southern region.

Much of this has to do with the fact that Coal India Ltd (CIL) is unable to supply the amount of coal that the country’s hungry power sector needs or demands. For long, CIL did not have the money required to open new mines. Then, lack of environmental clearances—coal being located in so-called “no go" areas—further hampered supplies. All this has had a cumulative effect.

Today, the reasons that CIL gives for not supplying coal are viewed by many as “excuses". For example, power companies not having long—or medium-term power-purchase agreements has been cited as a reason for not signing fuel-supply agreements by CIL.

This is not really an “excuse" or a bureaucratic delaying tactic. The simple fact is that CIL’s ability to deliver coal, and at the “right" prices, is limited. Arm-twisting it into selling coal at reasonable prices is not a solution.

In better days, a solution could have been to end CIL’s monopoly and bring in other producers. But the manner in which the coal block allocation was handled has ensured that that route is closed now. The fact is that there was little coordination between different ministries (coal and power, for example) to create proper plans to ensure a smooth supply of coal. This is a problem that won’t disappear for at least some time.

Who is responsible for the coal supply mess? Tell us at

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Published: 24 Oct 2012, 11:52 PM IST
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