THE COAL “CRISIS”: GROUND REALITY

 Coal is the most important and abundant fossil fuel in India

 55% of the country’s energy need
 Whole industry based on coal
  The govt has informed the Parliament that there is no shortage of coal in the country
and Coal India Ltd has said that it does not foresee any shortage of dry fuel for power
producers till March 2022 as it is focusing on ramping up production to secure a stock of
about 70 million tonne by end of the current fiscal.

Importance of Coal to India:

 Commercial primary energy consumption in India has grown by about 700% in the

last four decades.
 Considering the limited reserve potentiality of petroleum & natural gas, eco-
conservation restriction on hydel project and geo-political perception of nuclear
power, coal will continue to occupy centre-stage of India’s energy scenario

Coal shortage:

 India is contending with two key challenges: soaring electricity demand as industrial

activity rebounds after pandemic curbs were lifted and  a slump in local coal output.
 Coal inventories at Indian power plants fell to around  1 million tons at the end of
September, about 76% less than a year earlier, according to government data.
 Average spot power prices at the Indian Energy Exchange Ltd. jumped more than
63% in September to 4.4 rupees ($0.06) a kilowatt hour.
 The impact on consumer prices would show up a few months later, when distribution
utilities get regulatory approvals to pass on the cost.

Impact of the shortage:

 If industries face electricity shortages it could delay India’s economic reopening.

 Some businesses might downscale production.
 India’s population and underdeveloped energy infrastructure will mean the Power
Crisis could hit long and hard

Factors for low coal production

 Covid-19 pandemic coupled with supply issues have led to the current coal
shortage.
 heavy rains have flooded mines and key transport routes.

Way forward

 Optimal Energy Mix in Power Generation: Power is generated through various

sources of energy such as coal, hydro, natural gas, and renewables (solar, wind).
 This gains tremendous importance as the future generation capacity mix should be
cost effective as well as environmentally friendly.
 Cost Effective Solar Plants: The average cost of coal-fired projects is Rs.4 per unit
and generally sees an upward escalation, whereas new solar power plants are being
bid out at less than Rs.3 per unit.
 New Technologies for Coal Based Units: The government has commissioned more
efficient supercritical coal based units and old and inefficient coal based capacity is
being retired. A range of new technologies (like Coal gasification, Coal beneficiation,
etc.) can be deployed to make coal-fired power plants more environmentally
compatible.