Coal demand10 May 2022 08:57
Coal shortage and heatwave spark India's power woes
By Soutik BiswasIndia correspondent
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Three-quarters of the electricity produced in India uses coal
9 May 2022
For more than a month, Sandeep Mall's engineering goods factory next to the Indian capital, Delhi, has been facing crippling power cuts, sometimes up to 14 hours a day.
The 50-odd machines in the factory located in a major manufacturing hub in Faridabad make products for aeronautics, automobile, mining and construction industries.
"Every time the power goes off, the machines stop, the semi-finished products get rejected and we have to start all over again," Mr Mall says.
That happens when he fires up diesel-powered generators to keep the factory running. He says it is three times as expensive to run it on diesel than what he pays to the local power transmission authority.
"This erodes my competitiveness, cuts into my profits. It's a complete mess, and is very frustrating," Mr Mall says.
"These are the worst power cuts I have faced in over a decade."
Beginning in April, power cuts and outages have rippled across India, slowing factories, closing schools, and sparking demonstrations. Two in three households said they were facing power outages, according to more than 21,000 people in 322 districts surveyed by LocalCircles, a polling agency. One in three households reported outages of two hours or more each day.
Image caption,
Sandeep Mall's engineering products factory near Delhi has been facing outages up to 14 hours a day
At least nine states, including Haryana, where Mr Mall's factory is located, are suffering from prolonged outages. The main reason why electricity is in such short supply is a shortage of coal.
India is the world's second-largest producer and consumer of coal. The fossil fuel keeps the country's lights on: three-quarters of the electricity produced uses coal. India sits atop the world's third-highest reserves of coal and boasts of the world's largest coal mining company but per person consumption is still modest.
Why India can't live without coal
India imports a little under a quarter of its consumption: much of it is coking coal which is used in blast furnaces for making steel and is not available domestically. Yet there are perpetual shortages.
Last October, India teetered on the brink of a power crisis when stocks at more than half of the country's 135 coal-fired plants ran critically low, or below 25% of normal levels. Now coal stocks are said to be critically low in 108 of its 173 power plants. The war in Ukraine means global prices of coal and natural gas have soared, making imports unaffordable.
"This crisis is worse than what it was last year as the demand is actually high. A perfect storm has built up now, and there are many reasons to blame," says Rahul Tongia, a senior fellow with the Centre for Social and Economic Progress (CSEP), a Delhi-based think tank.
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