Shortage in Indias Power Supply.

India has the fourth largest coal deposit in the world. It is the second largest fossil fuel producer after China and is home to Coal India, the world’s largest coal mining mine, which accounts for 80% of domestic production. Already allocated coal block mining capacity exceeds expected demand in 2030 by approximately 15% to 20%.


So why are India’s power plants facing coal shortages each year, leading to widespread power outages, exposing parts of the country to darkness and endangering industry?
There are several factors. India has a long time policy of minimizing coal imports. In February 2020, Coal Minister Pralhad Joshi announced that the country would stop importing steam coal from 2023 to 2024.
Mr Joshi said the Ministry of Coal will work with the Ministry of Railways and the Ministry of Shipping to allow Coal India, prisoners and commercial miners to discharge more coal from their supply by 2030. And the coal supply at power plants is running out at an alarming rate. The Department of Energy is currently blaming the decline in coal imports due to the current crisis. In 2018-19, 21.4 million tonnes of coal were imported for mixing, down to 23.8 million tonnes in 2019-20 and 8.3 million tonnes in 2021-22.



Power plant coal inventories have fallen by about 13% since April, reaching pre-summer lows. And for the first time since 2015, Coal India will import fuels used by state-owned and private power companies. The Ministry of Energy said almost all states showed that multiple state bids for coal imports would cause confusion and that the decision was made after calling for centralized procurement by Coal India.
Imported coal costs five times as much as domestic mining, so the center is being pushed back by the state.
Recently, the government has also pressured utilities to increase imports to mix with local coal. Last year, after a two-year break, three tranches of coal auctions were held and nine blocks were successfully awarded.

In September 2021, the Ministry of Coal issued a strict warning to owners of confined coal blocks, stating that their mines should increase production or face restrictions on coal supply by the CIL.
The ministry has discovered that these mines are producing below target.

Of the 43 coal mines outsourced to private companies in the energy, steel and metals sectors, none have met their annual production targets.
On May 6, Coal India announced that it would provide the private sector with 20 closed and abandoned underground coal mines and reopen and operate its revenue sharing model.

According to journalist Shreya Jai the current power supply chain does not seem ready to handle periods of high growth and state discos cannot pay gencos, but the power supply chain starts with state discos and needs repairs. Railroads, on the other hand, are struggling to align the thermal power industry’s demands for faster coal supply with those from other industries. Rakes must be prepared to meet the growing demand for almost all other bulk commodities, from cement and steel to sand and edible grains. By strengthening the value chain of the electric power sector, it is possible to resolve the coal supply-demand mismatch in the long run.