About 124 GW of thermal capacity at risk of severe coal shortage in India

Central Electricity Authority data indicates that coal stockpiles at power plants fell to the lowest levels since November 2017

With the pandemic receding and more citizens getting vaccinated, the Indian state distribution utilities’ have reported a power demand jump of 10% in July and 18% in August. 

The rising demand situation has led to a severe shortage of coal in India’s massive fleet of coal plants. It is likely that the nation will have to buy expensive fuel from overseas or else risk blackouts.

As per the data of the Power Ministry, a total of approximately 124 GW of coal generating capacity, which is in the tune with more than 60 percent of the nation’s generation capacity, had less than a week of inventory as of Sept. 24, 2021. 

According to government data, power stations imported 1.9 million tons of coal in August, a 42% decline from a year before. The Central Electricity Authority reported that stockpiles had dropped to their lowest level since November 2017. 

India is not the only nation facing fuel shortages. Energy shortages are impacting buyers across the globe as the increased demand outpaces supply.

Debasish Mishra of  Deloitte Touche Tohmatsu stated that the current dry spell could force plants to buy imported coal, or pay significant premiums at domestic auctions. This addition to the cost of fuel in an economy that has already been stung by higher oil prices may make the situation worse.

Mishra added that the global fuel supply chains are being burdened by the spike in electricity demand post-pandemic. Though India has made significant strides in increasing its power generation capacity, it failed to pay as much attention to the coal supply infrastructure, he pointed out.

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