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India considering strategic reserve for imported coal to tackle power shortage

India's current coal crisis has coincided with a sharp spike in electricity demand. (HT_PRINT)Premium
India's current coal crisis has coincided with a sharp spike in electricity demand. (HT_PRINT)

  • Coal crisis: According to the latest coal-stock data of the Central Electricity Authority (CEA), the number of non-pit head projects having less than four days of coal was 61 on October 19
  • India has the world’s fourth-largest reserves and is the second-largest producer of coal

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The Centre is planning to maintain strategic reserves of natural gas and imported coal to address prevent future supply crises.

According to Alok Kumar, power secretary, citing an example of Russia said that countries meet their own needs first when there is a supply crunch, curtailing supplies to European nations because they wanted more gas locally.

"So let us start thinking and discussing about keeping a strategic reserve of gas and imported coal, so that economies are able to tide over these supply shocks for about a month or so," Kumar said at the South Asia Power Summit organised by the Confederation of Indian Industry.

Coal shortage at the thermal power plants is continuing. According to the latest coal-stock data of the Central Electricity Authority (CEA), the number of non-pit head projects having less than four days of coal was 61 on October 19 and 58 on October 18. The data showed that the number of plants with supercritical stock was 65 last week. The coal stock situation has improved eventually but the crisis is continuing.

However, union coal minister Pralhad Joshi recently said that coal supplies to India’s power plants will be increased to 2.2 million tonnes (mt) daily to help fuel stocks reach 10 mt by 2021, from the present levels of around 7.5 mt.

The shortage of coal stocks has raised concerns about a possible electricity shortage, as coal-powered projects totalling 202.22 gigawatt (GW) account for more than half of India’s power generation capacity.

With power plants burning 1.85 mt-1.87 mt of coal every day to generate electricity, the playbook is to stock 3 lakh tonnes per day, resulting in an addition of 3 mt fossil fuel stock over 10 days.

India's current coal crisis has coincided with a sharp spike in electricity demand, growth in number of electricity consumers, and inadequate stocking up by power projects before the monsoon. Also, heavy rains in September impacted coal production and dispatch, and non-payments of coal dues also contributed towards inadequate supply.

India’s daily electricity consumption has crossed 4 billion units, resulting in an 18% spike in coal consumption during August-September 2021 compared to the corresponding period in 2019.

India has the world’s fourth-largest reserves and is the second-largest producer of coal. While CIL’s annual production target is 660 mt for the current financial year, the coal off take is expected to be 740 mt.

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