Policy Wise: India’s Power Sector

The supply bottlenecks causing power shortages


From UPSC perspective, the following things are important :

Prelims level: Power generation in India

Mains level: Paper 3- Coal shortage crisis


The power sector in India is going through a crisis. Peak shortages in some states have reached double digits.

Chronology of the crisis

  • First, with summer approaching before time, power demand has shot up to record levels.
  • The second reason for the rise in power demand is that the economy is recovering, and demand from the industrial sector is going up.
  • All things put together, power demand crossed 207 GW on April 29, which is about 14 per cent higher than what it was a year ago.
  • Experts feel that the peak demand may even touch 215 GW in the coming months.

Coal shortage crisis

  • On average, coal stocks available are only good enough for about eight days’ generation against a norm of 24 days.
  • In some plants, the stocks available are just about enough to run the plant for a day or two more.
  • Part of the problem of poor coal stock is also rumoured to be on account of the non-payment of dues of coal companies.
  • But this is not the major cause of the shortage.

Reasons for coal shortage and fall in generation

  • The fall in coal stock in power stations is because of two main reasons.
  • 1] Rise in international price of coal: The first is that due to a rise in the international price of coal on account of the Ukraine crisis, all plants that were importing coal have either stopped generating completely or are generating at much lower levels.
  • We have a sizeable generating capacity based on imported coal, estimated at about 16 GW to 17 GW.
  • All these plants after stopping imports are now looking for domestic coal, creating pressure on domestic coal.
  • 2] Non-availability of rakes with Indian railways for transporting coal: Though about 22 MT of coal may be available in power stations, if one includes the stocks available with mining companies, the figure is well over 70 MT.
  • So, it is all a question of transporting the coal to the power stations.
  • 3] Fall in generation from gas-based plants: To make matters worse, generation from gas-based plants has also fallen due to high gas prices in the world market.
  • 4] Impact on hydro generation: Reservoirs, too, are drying up due to intense heat which will adversely affect hydro generation.

Transportation problem faced by Indian railways

  • The railways have about 2,500 rakes which can be used for coal transportation.
  • With a turn-around time of about four-and-a-half days which goes up to nine days for coastal regions, the railways can provide only about 525 rakes on any single day. 
  • Of this, about 100 rakes are used for transporting imported coal and therefore, only about 425 rakes are available on a daily basis for transporting domestic coal.
  • But only 380 rakes were being provided in the first half of April this year, though efforts are on to increase this to about 415 rakes.
  • The railways prefer to transport coal over short distances in order to save on the turn-around time.
  • There is also the issue of availability of tracks since they are being used on a back-to-back basis.
  • Thus production has to be enhanced so that the replenishment rate is higher than consumption.
  • Unless we do that, the total stock of coal in the country will deplete further and it will no longer be a mere transportation problem as it is now, but a general lack of supply of coal.


This is the right time to enhance coal production and build adequate stocks because once the monsoon sets in, production will fall.

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