Coal Production, Supply, Mis-Management are deepening Power Crisis: Experts

The deepening power crisis hit national headlines on regular basis in the past week. The authorities at the helm of affairs, instead of putting their heads together to find out viable solution to these impending crises, are routinely engaged in blame game and are passing the buck on one another. The crisis and the irresponsible…

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Mohd Naushad Khan

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The deepening power crisis hit national headlines on regular basis in the past week. The authorities at the helm of affairs, instead of putting their heads together to find out viable solution to these impending crises, are routinely engaged in blame game and are passing the buck on one another. The crisis and the irresponsible statements remind us of the days when there was shortage of Oxygen in the country.

Earlier, there have been many reforms in the coal sector but the issue of coal shortage keeps on mounting pressure every now and then. The federal tug of war can be seen irrespective of the duties and responsibility of those at the helm of affairs. The authorities wake up only when the crisis gets deeper. Shortage of coal is no doubt an important factor but there are many other factors which require attention if the authorities are serious to find immediate short term and long term solution to evade such a crisis in the future. Experts believe that apart from production and supply issue, mis-management has also led to the power crisis.

On the on-going coal shortage and power crisis, Shailendra Dubey, Chairman, All India Power Engineers Federation (AIPEF) said, “Coal crisis has resulted in power crisis and it has not taken place overnight. In between April-June (monsoon takes place during July, August and September), as per normal norms, coal stocks are reserved. As per the norms of Central Electricity Authority, there should be stock of coal for at least 21 days.

“But during April-June there was no coal and the reserve was of 5 to 7, or 10 days. In 2020, there was pandemic and lockdown. Compared to the situation in 2019, there was 18 per cent increase in demand of electricity. But during the same period coal production was increased by 11 per cent as compared to that in 2019. But in spite of that, out of total 135 power thermal power plants in India, the situation in 112 plants is critical (stock of maximum one week) or super critical (stock of maximum 1-2 or even ½ days). If they say that the demand of electricity has increased then it is also true that coal production has also increased. To me, there is something very fishy behind the entire crisis. The game is simply to provide maximum profit to private players what I suppose,” said Chairman of AIPEF.

He added, “In 2015, Coal India Limited had reserve of 50 thousand crore which the Central government had used it for infrastructure development or for some other works. Today, Coal India has reserve of 10 thousand crore. Surprisingly, Coal India has been run so casually that in the last whole year, Coal India had no CMD.  It was run under the whims and fancy of the Coal Secretary. It is not as simple to say that due to rain the crisis has taken place. Yesterday, the Central government has put a ban on e–auction and has said that Coal will be provided only to thermal plants. As a result of it, Steel, Aluminium, Copper, Zinc and many more others where coal is used there has been unprecedented rise in prices in these products.”

“The biggest injury came from IPP (Independent Power Producers). They stopped the plants which used to run through imported coal. Approximately 30 per cent plants (as per record of the government) are closed but as per our record it is 40-50 per cent. Already there was crisis and the private players have closed around 50 per cent plants. At Mundra (Gujarat) there is 4000 megawatt power plant of Tata and 4000 megawatt power plant of Adani and out of total 8000 megawatt, there is zero production. Instead of taking action, the power minister and secretary are only making statements,” he argued.

“On 13 and 14 October, Hindustan Power Ltd Adani, Teesta were selling electricity at Rs 18 per unit. And JP Nigre Thermal Power Plant, Raipur Energy, Raigarh Energy, Jindal Power were selling at Rs 17 per unit against Rs 5 to 6 per unity before crisis. Will the Central government act on it and put a cap on them who are indulged in black marketing during the crisis? The statement given by the government in the run up to the power crisis resembles with the statement made during shortage of Oxygen and the ground reality at that point of time. The same rhetoric and the logic are being given today,” said the Chairman.

According to Sunil Dahiya, an analyst with Centre for Research on Energy and Clean Air, “Most of the time the coal crunch is eased through imports but in 2021 the country hit a perfect storm situation where extreme weather in India and disrupted coal supplies globally resulted in higher coal prices internationally. The coal power sector, caught between high international coal prices and short stocking of coal by power plants/ supply of coal, went into crisis in the later part of September 2021 with many power plants operating with dwindling reserves.”

Dahiya added, “Despite lower generation from coal-based power plants and higher contributions from renewable energy and hydro generation sources, coal-based power plants are facing a resource crunch with just few days of coal stocks available. Coal-based power plants, which had 50.9 MT (million ton) of coal stocks in April 2020 (31 days of stock) and 28.8 MT (16 days stock) in May 2021, are now facing a crisis when the coal stock at power plants dropped to 8 MT at the end of September 2021. This further reduced to 7.3 MT (just enough for 4 days) at the end of the first week of October 2021.”

“The severity of the situation appears even worse when the data is seen on a more detailed level. The number of power plants with zero, one, two, three, four, five and more than five days of coal stock available (as on 7th October 2021) were: 16 (16.9 GW), 30 (37.4 GW), 18 (23.5 GW), 19 (29.1 GW), 9 (8.9 GW), 7 (8.7 GW) and 36 (40 GW), respectively,” he said.

On steps that can help evade such a crisis in the future, Dahiya said, “In either case the crisis could have been avoided if there was reasonable prediction on demand and timely uptake of stock by the power companies. Contrary to popular narrative, this is not a coal crisis or installed coal power capacity crisis but a management crisis. New coal mines and power plants are unlikely to solve the issue, rather high quality power demand projection and strict monitoring of coal stock at power plants would avert such a crisis in the future.”