Coal and Mining Sector

Looming Power Crisis in India


From UPSC perspective, the following things are important :

Prelims level: Pithead and Non-pithead plants

Mains level: Coal shortage and Power Crisis

Temperatures have shot up across many parts of the country with the early onset of summer, leading to a rise in the demand for power. Instances of power outages have been reported in several states.

Why is there a concern around power supply?

  • The demand for power has soared.
  • Several states, including Andhra Pradesh, Madhya Pradesh, Punjab, Haryana, Telangana, and Maharashtra, are facing power outages.
  • The coal stock with power generation companies (gencos) is not adequate to meet the rising demand.

How bad is the coal shortage?

  • Normally, a power plant must maintain 26 days of coal stock.
  • However, at present, several power plants are reporting critical levels of coal stock.
  • Data from the Central Electricity Authority (CEA) shows that 97 power plants out of the 173 that the CEA tracks have critical levels of coal inventory.
  • Of the 173, there are 155 non-pithead plants or power plants that are not near coal mines.
  • These have an average of 28% of the stock compared to the normal scenario.
  • The 18 plants that are near coal mines have an average stock of 81% of the normal requirement.

Note: Non-pithead plants are power plants where the coal mine is more than 1,500 kilometres away.

Is coal shortage the only reason for a power crisis?

  • The lack of railway rakes to transport coal is also a major problem.
  • The state power distribution companies (discoms) have also not been able to clear their dues to power generation companies.
  • The covid-19 pandemic has now weakened the finances of many states, raising doubts about the ability of state-owned discoms to clear their dues.

What has led to the coal shortage?

  • Several factors have led to the shortage, including the stagnation of production by Coal India Ltd (CIL) after the bumper production in FY15 and FY16.
  • There seems to be a tussle between the Centre and coal-rich states, which delay environment and land acquisition clearances.
  • High dues of discoms towards gencos and the eventual delay in gencos paying CIL has complicated the scenario.

How has the Centre responded?

  • CIL has made efforts to raise supply to the power sector by reducing its dispatch to other industries.
  • The power ministry said that to avoid long-distance transport, a ‘tolling’ facility would be allowed.
  • In this system, state gencos can allow other thermal power plants near a coal mine to utilize their coal linkages to generate and transmit power back.
  • This is an easier alternative compared to transportation.
  • Further, the states need to ensure that imported coal-based plants operate at reasonable tariffs.

Try answering this PYQ:

Consider the following statements:

  1. Coal sector was nationalized by the Government of India under Indira Gandhi.
  2. Now, coal blocks are allocated on lottery basis.
  3. Till recently, India imported coal to meet the shortages of domestic supply, but now India is self- sufficient in coal production.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 and 3 only

(c) 3 only

(d) 1, 2 and 3


Post your answers here.
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