Indian coal loaders take a rest at a Bharat Coking Coal Limited open cast mine in Dhanbad in the eastern Indian state of Jharkhand. The country's coal-fired power stations are facing shortages. Photo: AFP

JAIPUR – State after state in India has been reporting power outages as the second most populous nation in the world is facing a huge energy crisis. If some urgent and appropriate steps are not taken by the Narendra Modi government, many states could have blackouts.

Many political analysts say this is the second time the Modi government has failed to handle a crisis adequately. During the second wave of Covid-19 from April to June, the country was marred by a shortage of oxygen, and now a shortage of coal supplies has started to hit the thermal power plants that produce electricity.

Coal makes up about 70% of India’s electricity mix. 

Although India’s Ministry of Coal has tried to reassure the public that there is ample stock, no one is buying their statement.

In a recent press statement, the Ministry of Coal tried to reassure the public that ample coal was available in the country to meet the demand of power plants. Any fears of a disruption in the power supply were entirely misplaced, it said.

“The coal stock at power plant end is about 72 (7.2 million) Lakh tonnes, sufficient for 4 days requirement, and that the Coal India Limited (CIL) end is more than 400 Lakh (40 million) tonnes, which is being supplied to the power plants,” the ministry said in the statement.

The ministry also said that domestic coal-based power generation had grown by almost 24% this year, until September 2021, based on a robust supply from coal companies. The daily average coal requirement at the power plants is about 1.85 million tonnes per day, whereas the daily coal supply has been about 1.75 million tonnes per day.

Due to an extended monsoon season, supplies have been constrained.

Laborers collect coal at an open mine in Dhanbad in the eastern Indian state of Jharkhand. Photo: AFP

The coal available at power plants is a rolling stock that gets replenished by supplies from companies daily. Therefore, any fear of coal stocks depleting at the power plant end is erroneous, the ministry said. This year, domestic coal supply has substituted imports by a substantial measure, it added.

However, the situation on the ground is not what the ministry claims – in fact, it’s the opposite.

In India, of the 135 power plants that are dependent on coal for electricity, more than 70 are reported to be facing a crisis. According to media reports, 20 have already shut and more will follow in the next few days if coal is not made available.

The situation has become so bad that some states – like the national capital Delhi, Rajasthan, Punjab, Kerala, Maharashtra, Uttar Pradesh, Madhya Pradesh, Jharkhand, Andhra Pradesh and Tamil Nadu, to name a few – have already resorted to electricity cuts or are on the verge of announcing massive cuts in the electricity supply.

Arvind Kejriwal, the chief minister of Delhi, said on Twitter: “Delhi could face a power crisis. I am personally keeping a close watch over the situation. We are trying our best to avoid it. In the meanwhile, I wrote a letter to the prime minister seeking his intervention.”

“I draw your attention to the prevailing coal shortage situation that is continuing since August/September 21 for the third month in a row, which has affected the power generation from the major Central Generating plans supplying power to NCT of Delhi,” he said in his letter to the PM.

“If the situation continues unabated, it would severely impact the power supply situation in Delhi,” Kejriwal added.

However, Delhi’s Power Minister fired back.

“There is no coal power plant in Delhi. We buy electricity from coal plants situated in other states. NTPC capped the production capacity of all its plants to half. There can be two reasons, first coal shortage or secondly center has told them to do it,” Delhi Power Minister Satyendar Jain reportedly told ANI, an Indian news agency.

Smog in Kolkata in 2019, much of it from coal-fired power plants. Photo: AFP / Indranil Aditya / NurPhoto

NTPC, or the National Thermal Power Corporation Limited, a public sector undertaking, is India’s largest energy conglomerate. 

According to media reports, a large number of thermal power stations are within days of running out of coal.

Professor Arun Kumar, the Malcolm Adiseshiah Chair Professor at the Institute of Social Sciences and a retired Professor of Economics at Jawaharlal Nehru University (JNU), said about 66% of the electricity in India is supplied by thermal power plants using coal.

“Reports suggest a shortage of coal at the power plants. This is impacting the availability of power in the country with some reports suggesting that there may be blackouts. This will impact both productions if there are power cuts and prices as energy is a basic input,” Arun Kumar said.

He added that the main factors underlying the surge in demand for electricity and the crisis in the coal supply is that imports of coal have been impacted due to the pandemic, mines possibly slowed production due to lockdowns and it was likely that heavy rain has disrupted both production and supply.

Kumar noted that the country had also seen a shift to thermal power, whose share has risen from 62% to 68% recently. So the demand for coal had risen sharply, and the mines were not ready to supply this sudden surge.

However, some experts blamed the Modi government for the crisis and said the government was not prepared to tackle this kind of problem. “They did not see it coming. Bad planning is a small word – it is a blunder. They also did not keep enough stocks of coal, which there earlier used to be,” said an energy expert on the condition of anonymity.

Raghuvendra Mirdha, a Congress leader and a former trader in Glencore, one of the world’s largest globally diversified natural resources and commodity trading companies, said: “Yes, there is a power crisis in the country. We all should show frugality in terms of electricity consumption.

“However, the business of coal imports and its blending, its procurement by power departments in respective states and grid management – this all needs deep scrutiny.”

Ajay Data, ASSOCHAM Chair (Rajasthan State Development Council), said: “Electricity is like oxygen for industry and a very important resource for today’s life. The crisis of power has to be dealt with in the utmost care. Dialogue with industry leaders and trade chambers is necessary.” 

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) is a non-governmental trade association and advocacy group. 

“This kind of dialogue must have been done at least 15 days back, but still it is not too late to start it on a daily basis and then plan the power cuts so that industry suffers minimal (damage),” Data said.

“If industry suffers it will hit the top line, bottom line and create unemployment in the entire country,” he added.

Echoing similar views was Professor Arun Kumar, who said the surge in energy prices and the shortage of power would impact production and demand and slow the economic recovery.

“More importantly, the poor who are already hit will be further hit due to loss of employment and a decline in purchasing power.”

An Indian fire-fighter cools hot coal at a stockyard at a coal-fired thermal power plant belonging to Essar Power in Salaya, some 400km from Ahmedabad. Photo: AFP / Sam Panthaky

According to the Centre for Monitoring Indian Economy (CMIE), a leading business information company, the unemployment rate in India now stands at 7% – 8% in urban areas and 6.5% in rural areas. This is quite high and if the energy crisis deepens this is bound to go up.

And mind you, it is not only the industrial sector which will be hit, but agriculture and domestic consumers will also be badly affected. In India, sowing the Rabi crops, or winter crops, starts from November, and if the situation does not improve it would be difficult for farmers to water their fields.

Domestic consumers would also face problems as this is festival time in India and the festival of lights – Diwali – is on November 4. During this festival, which usually lasts for five days, people illuminate the interior and exterior of their homes.

There have also been concerns by intellectuals and the media that the entire issue of coal availability and power shortages should be not be used as an excuse to privatize the power sector. The Indian government has advocated the monetization of national assets in the recent past.