Quick fix required to address power, coal shortage
There is a sudden and acute shortage of power gripping the country this summer. Many cities and states, especially in north-west and central India, are reporting frequent electricity breakdowns as they struggle to meet high demand. Many factors are contributing to the crisis. As Covid has receded, economic activity has resumed and is back in full swing, but the electricity distribution companies are not able to meet the demand. The intense heatwave has only added to the woes with India suffering the hottest April in 122 years. Demand for power has thus spiked 9% last month; and in May it is expected to increase another 10%, as summer intensifies.
One of the major reasons for electricity generation not keeping pace with demand is the acute shortage of coal. Stocks are critically low in 108 of the 173 thermal power plants. Coal still accounts for nearly 75% of India’s power output. India’s biggest coal suppliers, Coal India and Singareni Collieries have been producing 5% more than they did this time in 2021, but this is still not meeting plant demand. The Railways has had to cancel more than 650 passenger trains till the end of May to clear the tracks for coal cargo to be rushed to power plants.
The problem needs to be addressed quickly. Not only has normal life been disrupted with outages, industrial production too is being affected. In the near-term, the crisis could have been avoided by importing coal. However, cash-strapped power companies, hit by Covid losses, dragged their feet, and have been avoiding coal imports at prices that have gone up dramatically since the Ukraine war. The Union government is now rushing to clear bottlenecks.
An attempt is also being made to restart many non-operational power plants. There is also a serious financial problem: state-owned power distribution companies, forced to sell electricity at a loss, are not able to pay their bills to power generation companies, which in turn cannot make timely purchases of coal. In the longer-run, diversification of power generation away from fossil fuels like coal is the answer. But little has been done to develop optimum, alternative sources like wind and solar.