Domestic, national and global issues have, in different measures, contributed to the ongoing coal conundrum in India and subsequent ‘power crisis’.
Climate change, supply logistic issues, geopolitical tensions, slow revival of the economy after the COVID-19-induced lockdown, weak inter-ministerial coordination and poor functioning of the power distribution companies have had a domino effect on the energy dynamics in India.
India is currently facing a daily power deficit of 1 per cent from the average of 0.3 per cent. The deficit is expected to widen further, according to Fitch Ratings. This widened deficit is an outcome of the increased gap in power-supply demand as it went up by 20 per cent in May, compared to the same period last year.
This increase in power demand has led to a surge in prices of energy at the Indian exchange, soaring to Rs 12 per unit — the highest limit allowed by the electricity regulatory commission.
The unexpected demand for energy has once again brought the country’s coal shortage to the forefront. Last October, the coal shortage was largely blamed on low supply of coal from mines. This year, the production by Coal India Ltd has increased by 23 per cent, from Singareni Collieries Company Ltd by 34.2 per cent and from captive mines by 40 per cent, data from the Union Ministry of Coal showed.