Coal Fall in India

Thermal power stations are facing severe coal shortages, and coal stocks have dropped to four days of fuel in a growing number of thermal power stations.

Context

Thermal power stations are facing severe coal shortages, and coal stocks have dropped to four days of fuel in a growing number of thermal power stations.

Reasons for the shortage of coal

• Eruption in Power demand: Economy recovering from the Covid-19 pandemic coupled with supply issues have led to the current coal shortage.
  • India consumed 124 billion units in August 2021 compared to 106 billion units in August 2019.
  • In addition 28.2 million households and these households are buying lamps, fans and television sets which has led to an increase in demand for 200 Gigawatts during the Covid period.
• Increased Share of Thermal Power Plants: Coal fired thermal power plants have also supplied a higher proportion of the increase in demand leading the share of thermal power in India’s power mix increasing to 66.4% from 61.9% in 2019.
• Floods and Rainfall: Lower than normal stock accumulation by thermal power plants during the April-June period and continuous rainfall in coal-bearing areas in August and September which resulted in lower production and less supply of coal from coal mine.
• Import Reduction: The steady movement of low imports coupled with high international coal prices has also led to a reduction in coal imports.