Environmental curbs have been eased in India to help coal miners increase their output as the country struggles to keep power supplied to the population.
More than 70% of India’s power requirements are met by coal-based thermal plants.
Many parts of the country have been facing power rationing due to heightened demand caused by the opening up of the economy after Covid curbs and a heatwave. Blackouts in various towns have increased the stress on various industries that were trying to ramp up production after the easing of Covid lockdowns.
The temperatures in many of the northern and western parts of the country have been about 40 degrees celsius and the usage and sales of air-conditioners have increased substantially.
According to the relaxed curbs for coal mines, miners can raise their production by 10% without requiring environmental approvals that include impact assessment and consulting local residents. The changes will be in force for six months.
The government is also planning to reopen more than 100 coal mines that were considered financially unsustainable.
Miners are hoping to increase production before the rainy season sets in next month. Rain often leads to flooded mines and affects production, so they have a very small window of time to ramp up output.
Many thermal plants in the country are now operating with critical reserves.
Another major factor that has led to this crisis is the rise in the price of coal on the global market. Many thermal plants built in India’s coastal regions were depending on imported coal from countries like Indonesia to run their plants.
These plants have now either lowered supply or shut down. They are also now depending on domestic coal supply to keep their plants running.
The power ministry recently issued an order asking all imported coal-based plants to produce electricity at 100% of their generation capacity. This is applicable even for projects facing insolvency.
The ministry has also directed state-owned financiers like Power Finance Corporation and Rural Electrification Corporation Limited to provide short-term loans to imported coal-based thermal plants. This is to encourage these plants to import coal and enhance overall power availability, and the offer is valid until October 31.
Indian Railways is facing a huge logistical challenge as it has to send coal to more power plants. This has led to an increase in the turnaround time and the state-owned rail operator has curbed supplies to other sectors to meet the demand for thermal plants. It has also canceled some passenger trains to free up tracks to speed up the coal supply.