‘What's next for coal,’ Nikhil Kamath ponders as stocks dwindle. See tweet
Kamath shared a four-panel illustration discussing the current coal crunch in India and the subsequent energy crisis that might follow
As electricity production takes a hit due to lack of coal, Zerodha co-founder Nikhil Kamath shared an infographic explaining what it happening. Titled ‘Global Energy Crisis in India and China’, the illustration explains why there power plants are facing troubles in the country, how the situation has evolved in the nation since the pandemic, the issues India is facing and what can be done to resolve them.
Kamath posted the four-panel illustration on Twitter with the caption: “What's next for coal?”
The first panel delves into how rising coal prices have impacted imports, leading to shrinking supplies to power plants. The high gas prices have kept the gas-run thermal power plants idle as Indian customers do not want to pay those prices.
The second slide claims that nearly three crore electricity consuming households emerged in India during the last 18 months in India. During September 2021, power consumption went up to 124 billion units per month from 106 billion in the August-September 2020.
To top the rise in demand and incredibly high prices, heavy rains and storms in parts of India where coal mines are located further undermined production. Meanwhile, China and European countries buying coal at high prices drove rates upwards.
Discussing solutions in the last slide, the illustration mentions systematic load shedding and price incentives.
An energy crisis is looming over India as coal stocks have dwindled to troubling levels. Most of the coal-fired power plants in the nation have to just days worth of stock.
The shortages have stoked fears of potential black-outs in parts of India, where 70% of power is generated from coal. Experts say the crunch could upset renewed efforts to ramp up manufacturing.
Power cuts and shortages over the years have subsided in big cities, but are fairly common in some smaller towns.
Out of India’s 135 coal plants, 108 were facing critically low stocks, with 28 of them down to just one day’s worth of supply, according to power ministry data released on Wednesday