The gravity of power crisis due to present coal availability challenges for Indian power plants?

In a country where 70 percent of the electricity is generated using coal, this is a major cause for concern as it threatens to derail India’s post-pandemic economic recovery.

Anil Saboo, CMD, Elektrolites Power Pvt. Ltd.

More than half of the country’s 135 coal-fired power plants are running on fumes – as coal stocks run critically low. Importing more coal to make up for domestic shortages is not an option at present. We have seen shortages in the past, but what’s unprecedented this time is coal is really expensive now. This is a global phenomenon, one not specifically restricted to India. If gas prices dip today, there could be a switch back to gas. It’s a dynamic situation. In view of above India should continually focus on increasing renewable resources for sustainable Power and permanent solutions.

Vikram V, Vice President & Sector Head – Corporate ratings, ICRA

Kashish Shah, Energy Finance Analyst, IEEFA

The current crisis has more to do with the shortage of coal stockpiles at coal-based power plants and coal transportation logistics than the volume of coal mined. Plants designed to operate on imported low-ash coal are suffering due to the record high prices of imported coal. Extremely low utilisation of a total of 17GW of such plants has been another obstacle to meeting the high demand. The current crisis presents an opportunity to accelerate the commissioning of clean energy capacity. Distributed and rooftop solar photovoltaics, which could be built faster without putting pressure on transmission networks, will provide better outcomes compared to increasing coal volumes that would require further expansion of the railway infrastructure.

Vibhuti Garg, Energy Economist, IEEFA, Lead India

The power shortage crisis has revealed that the cost of coal-based generation is high and, further, is inflationary. With energy demand likely to go up further, India needs to invest in sustainable energy choices. The government should accelerate the deployment of domestically produced, deflationary renewable energy. Investing in thermal energy to help India through the power crisis risks diverting limited financial resources away from cheaper clean energy, is needed. In addition, investing in a thermal asset at any stage of the value chain effectively locks in investment for 25-30 years or more.