India's Very Avoidable Coal Crisis

The key reason for current shortage is that Coal India is still the major producer

- Dhiraj Nayyar

India has an acute coal supply crisis that threatens to cripple power supply to households and industries in the weeks ahead. Over 50 large thermal power plants (accounting for around half of India’s coal power capacity) have zero to three days of coal stocks. GoI guideline is to maintain 14 days stock.

How did we come to this and what can be done?

Rapid recovery post Covid

Coal India Limited, practically the sole supplier of commercial coal in India, produced the same amount of coal in the first six months of financial year 2021-22 as it did in the first six months of the previous financial year. What has created the shortage is a surge in demand. Last year demand was subdued because of the pandemic and the various curbs associated with it.

This year too, at least in April and May, demand was subdued due to the acute second wave of the pandemic. That may have created a sense of complacency on demand. The better-than-expected economic recovery, particularly of industrial production, has created a surge in power demand.

Robust monsoon