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COAL CRISIS IN INDIA

SYLLABUS- GS MAINS PAPER 3

India is staring at a coal crisis as it faces a severe coal shortage. It was highlighted that coal stock at India’s power plants was 7.2 million tonnes and most power stations had only 3-4 days of coal. This is below the buffer that should exist.

HIGHLIGHTS

1. Stock depletion has happened in the wake of supply disruptions in other industrial inputs such as semiconductors.

2. But unlike other inputs where the causes are global in nature, the low reserve of coal at thermal power plants is a problem of our creation and comes just when economic activity is gaining sustained momentum.

INDIA’S COAL RESERVES

1. Coal is the most abundantly found fossil fuel. It is used as a domestic fuel, in industries and to generate electricity. Electricity from coal is called Thermal Power.

2. China, US, Australia, Indonesia, India are the leading coal producers of the world.

3. India is the second largest producer and consumer of coal in the world.

4. High reserves in India are Jharkhand, Odisha, Chattisgarh which accounts for approximately 70% of the total reserves in the country.

5. Majority of the produced coal is consumed for electricity generation.

In India, coal fixed thermal power plants account for 54% of India’s 388 GW installed generation capacity.

REASONS BEHIND THE SHORTAGE

1. There has also been a sharp increase in the price of imported coal owing to a rise in global demand.

Power plants that usually rely on imports are now dependent on Indian coal.

2. A sharp uptick in power demand as the economy recovers from the Covid-19 pandemic coupled with supply issues have led to the current coal shortage.

In August 2019, India consumed 124 billion units of power as compared to in August 2019, consumed 106 billion units.

3. 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.

4. Heavy rainfall in coal bearing areas in September month which led to lower production and fewer despatches of coal from coal mines.

5. Another reason for the supply crunch include lower than normal stock accumulation by thermal power plants in the April-June period.

IMPACT OF THE SHORTAGE

1. If industries face electricity shortages, it could delay India’s economy reopening.

2. India’s population and under developed energy infrastructure will mean the power crisis could hit long and hard.

3. Some businesses might choose to downscale productions.

MEASURES TAKEN BY THE GOVERNMENT TO ADDRESS THE SITUATION

1. The government is pressing thermal plants with captive coal mines to boost their coal output. It is also prioritising coal supplies for thermal power plants with low levels of stock.

Captive mines are operations that produce coal or minerals solely for the company that owns them and under normal conditions are not allowed to sell what they produce to other businesses.

2. The Power Ministry is also trying to increase the supply of coal by expediting the start of production from a number of mines that already have all requisite clearances in place.

3. The government has also boosted the number of rakes of coal being transported to thermal power plants.

4. The government has decided to prioritise coal supply to generation utilities that make regular payments to coal companies, and have been maintaining mandated levels of coal stocks.

WAY FORWARD

1. State-run coal India and NTPC Ltd are working to raise output from coal mines.

2. India will need to amplify its imports despite the financial cost.

3. There is also an opportunity to transition towards natural gas.

CONCLUSION

The current coal crisis is a wake-up call for India. Country needs to work towards long-term alternatives to ensure its growing domestic power needs that are met. Now the time has come to reduce its over-dependency on coal and pursue a renewable energy strategy.

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