In October 2021, as the economy recovered from the pandemic’s second wave, a sharp surge in energy demand triggered a spiralling fuel shortage across coal-fired thermal stations, which Union Power Minister R K Singh referred to as a “touch and go” affair that went “way beyond” the normal post-monsoon coal supply crunch. Six months hence, India is staring at a crisis again, this time induced by a debilitating fuel shortage at coal-fired thermal plants, which make nearly 70 per cent of India’s base load power generation capacity.
One of the major factors now is the low 26 per cent average Plant Load Factor (PLF) at which imported coal-based plants are operating compared with 56 per cent around this time last year. PLF is a broad measure of a power plant’s output during a period compared to its maximum output. With imported thermal coal prices surging from around $50-100 per tonne last year to around $225 per tonne now — triggered by global energy shortage and fresh uncertainties on account of the war in Ukraine, the viability of running these plants is under question.
Further, the newer thermal plants that were increasingly running on blended coal started using more domestic coal in the mix, adding to the pressure on the already tenuous domestic coal supply infrastructure.
The fuel supply gaps are clearly showing up in the non-pithead-based coal plants — or plants that are away from the coal pithead – which account for nearly 90 per cent of the country’s 165 major thermal plants. This has meant that actual coal stocks are less than a quarter of the normative requirement up to the end of April, according to Central Electricity Authority (CEA) data updated till April 28.
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In terms of specific reasons for outages or reduced output across key thermal stations tracked on a daily basis, at least 16 plants were reported to be struggling due to lesser coal supplies from state-owned Coal India Ltd (CIL) or its subsidiaries. The other reasons collated by the April 28 CEA report state 23 were affected due to unavailability of railway rakes or shortages of one kind or the other, 10 on account of disruption of coal supplies following large dues, five due to a shortfall with coal lying at the Paradip port, and another 12 due to low imported coal stocks.
Unlike last year’s shortage situation, the biggest triggers on both the demand and supply side seem to be different. The biggest factor on the demand side last October was the reopening of the economy after the second Covid-19 wave, while on the supply side, the post-monsoon production woes of CIL were a predominant factor.
This time, the main demand side factor is the unprecedented heat wave in north and west India, that has boosted demand for electricity, especially domestic and agricultural load, even as industrial load is climbing consistently. Energy demand in March was up nearly 9 per cent driven by a pick-up in load and touched an all-time high of over 207 gigawatts (1 GW or 1,000 megawatts) on April 29, with expectations that demand could touch 220 GW by May-June.
On the supply side, there seem to be three specific factors – the tapering off imported coal-based generation, supply constraints due to a shortage of rail rakes alongside lower supplies from CIL to some plants, and to an extent, the regulation of coal supplies to non-paying distribution companies (which is a continuing problem in the power sector).
And unlike the last time, when there was expectation the demand could start tapering off from the latter half of October and the winter set in, this time there is unlikely to be any respite till well into the second half of the year – given that the process of build-up of coal stocks that starts every March and goes on till the monsoons, is going to be an uphill task. While officials in the coal ministry have alluded to the power ministry underestimating demand, a senior official at the power ministry said the increase in demand “was largely in line with expectations” but that the availability of railway rakes had been the key constraint in meeting demand from power plants.
“The number of rakes that were to be provided did not increase as per expectation and the (demand) projections we provided,” the official said, noting that while the railways had agreed to provide 415 rakes per day for coal transportation in April, the actual number was around 387 rakes per day. “The issue would not have arisen if 415 rakes per day had been available from October,” he said.
The official said the power ministry had realised in December that thermal power plants may face low coal stock and asked states to start importing coal to augment inventories. A spokesperson for the Indian Railways said it was prioritising the delivery of coal to thermal power plants and had delivered over 400 rakes of coal a day over the past five days, hitting a peak of 427 rakes on April 28.
“Indian Railways has consistently been increasing the loading of coal to power houses from September and the rakes per day loaded (both domestic and imported) has increased from 310 per day to 409 rakes per day in March, an increase of 32%,” said Rajeev Jain, Additional Director General and Spokesman for the Indian Railways. The railways had also temporarily rescheduled or cancelled trains on less busy routes to prioritise rake transportation.
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