India risks another power crisis in July-August: Report on coal stock

Stock at power stations 'reducing consistently' since May 2020, says CREA.

A lower pre-monsoon coal stock at thermal power plants in India is suggestive of another power crisis in July-August, independent research organisation CREA has said.

The current coal stock stands at 13.5 million tonnes at pithead power stations and 20.7 MT cumulatively at all power plants across the country. "The data compiled from official sources suggest that the coal power plants are in no position to address even a minor spike in the power demand and there is a need to plan for coal transportation well in advance," Centre for Research on Energy and Clean Air's (CREA) latest report 'Failure to load: India's power crisis is a coal management crisis'.

The Central Electricity Authority of India (CEA) has predicted a peak power demand of 214 GW in August. In addition, the average energy demand could also increase to more than what it is in the month of May to 1,33,426 million units (MUs).

"The onset of the southwest monsoon will further hamper mining and transportation of coal from mines to power stations... If coal stocks are not replenished to adequate levels before monsoon, the country might be heading towards yet another power crisis in July-August 2022," CREA said.

It also said the recent power crisis in the country was not due to coal production but "distribution and official apathy".

"It is evident from the data that coal transportation and management was not sufficient to keep up with the increased demand from the power sector... The trends show that thermal power stations were not adequately stocked despite adequate coal mining," it said.

India saw a record coal production of 777.26 million tonnes (MT) in the financial year 2021-22 against 716.08 MT in FY21, an increase of 8.54 per cent. The country had a total mineable capacity of over 1,500 MT in FY 21-22 while the total production stood at 777.26 MT, approximately just half of its production capacity. Therefore, if there was a real coal shortage, coal companies had the option of simply increasing the production, Sunil Dahiya, an analyst at CREA, said.

"The current situation is not something that started in the recent past... Coal stock at power stations has been reducing consistently since May 2020, barring a few months in between.

"The primary reason for the power crisis last year was the inaction of power plant operators to stock adequate coal before the onset of the southwest monsoon. The timing is crucial as the monsoon floods coal mines, hampering their production and transport to power stations," the report stated.