India is the world’s second-largest producer, importer and consumer of coal. Around 70% of India’s power demand is met by thermal power plants, which are mostly powered by coal.
• In the post-pandemic years, a coal conundrum has been witnessed in the country. A surge in international coal price, shortage of coal stockpiles at power generation centres, poor financial health of power distribution companies, logistical issues and heatwaves are among the primary reasons.
They have been discussed under the following heads:
1. Increase in Coal Based Thermal Power plants: As of March 2001, the total installed capacity of these plants had stood at 60,935 MW which
increased by 300% in 2022. The plants demanded more coal for electricity generation.
2. Rising demand: There has been an increase in the demand for electricity as the economy has recovered. Coal is also used for manufacturing steel and cement, among other things. The production of finished steel (alloy and non-alloy) as well as cement has gone up in the past few years.
3. Slow growth in Domestic Production: Since 2001, the coal production within the country has increased at the rate of 4.4% per year. However this increase was unable to meet the rising demand.
4. Fall in Imports: This was primarily on account of coal prices going up dramatically, making coal imports unviable. The situation got even more troublesome post the onset of the Russia-Ukraine conflict.
5. Reduction in Domestic Supply: It was disrupted due to the reduced availability of railway rakes to transport coal.
A new coal supply plan has been put in to avert future crises. Coal-fired power plants were ordered to use imported fuel to operate at full capacity. Stock norms were also revised. Steps such as restarting idle import- based coal plants and increase in railway wagons, power sector experts are advocating timely preventive actions, including expediting the growth of renewable energy were taken and hence, coal crisis isn’t expected to repeat itself.