CURRENT POWER CRISIS IN INDIA

Ranjan Kumar Padmapati

(The writer can be reached at rkpadmapati@yahoo.co.in)

India is experiencing unprecedented electricity shortages since the beginning of October 2021 and is considered to be the worst of its kind since 2016. The power shortages are evident from the fact that grid frequency fell to 49.96 Hz from 50.09Hz two weeks earlier. Time of low frequency has increased to 21% from 1% of the previous month. The northern and eastern states resorted to rotating power cuts. The states of Punjab, Rajasthan, Gujarat, Maharashtra, Uttar Pradesh and Bihar are the worst sufferers, just to name a few. The above states are deficient in power, ranging from 2.3% to 14.7%. On average, there has been a shortfall of 750MU (million units). The reason is the short supply of coal to power stations. India's shares of fossil-based power stations are, coal 60.9%, Lignite 1.7% and gas 6.5%, diesel 0.1% respectively. The following points may be attributed to the short supply of coal.

With the prolonged monsoon up to September this year in central and eastern coalfields, open cast coal mines are affected badly by floods, forcing low production of coal and causing a delay in dispatch of coal. Pandemic also slowed down production. Coal mines could not build up stock during monsoon and summertime. The supply chain further got affected by not lifting coal from mines on time in a sustainable way to make space for storage at mines and to build up stock simultaneously at power stations. The supply chain is a dynamic activity to match demand and supply constantly. The other reasons are legacy issues of heavy dues of coal companies by many state-owned stations, could not buy coal. As a result, the stock further depleted. Meanwhile, demand increased at a faster rate, coal stock started depleting quickly at power stations. Though it is mandatory to maintain a stock of 15 to 22 days at power stations, power stations failed to stock coal. The percentage distribution of different generating sectors are as follows, Central sector 25.2%, state sector 26.8% and private sector 48.1%.

The CEA(Central Electricity Authority) monitors major 135 power stations and all these stations together generate 165GW (1GW=1000MW) of power on daily basis. The total stock of coal was 78,09,200 tonnes at 135 stations on 3rd October 2021., it was just sufficient for 4 days. The daily requirement of coal to produce 165GW of power is 18,24,100 tonnes. Many power stations running at a lower capacity and a few have taken shut down for want of coal. The stock of coal is further complicated by a steep increase in the price of imported coal from Australia and Indonesia. The price of imported coal increased to 200$ per tonne during September– October 2021 from just 60$ per tonne in March 2021. The TATA POWER which signed a contract to supply power to the following states as under, 1850MW to Gujarat, 475 MW to Punjab, 380 MW to Rajasthan, 769MW to Maharashtra, 380MW to Haryana from its imported coal-based station at Mundra stopped production, just to mention one example. Energy has become a scarce commodity price per unit reached Rs 19 in the IEE (INDIAN ENERGY EXCHANGE) bid now, from Rs 3–Rs 4 per unit just three months before.

Above price rise compelled to reduce dependence on imported coal and a shift to domestic coal has been noticed. As compared to 2019 there has been a 43.6% reduction in power generation from imported coal which leads to the additional demand of 17.4 million tonnes of coal from April to September 2021 and was met by Indian coal only. Due to decreased dependence on imported coal production during the last six months, April to September 2021 increased to 315 million tonnes from 282 million tonnes compared to the same period of last year, an increase of 12%, as CIL claims. The CIL (Coal India Limited) supplies 80% needs of the country, during 2020-21 the CIL produced 596 MT. Total coal stock at power stations was 24 MT at July-end 2021 which was on a par with the last 5 years average. It was only in August coal stock fell by over 11MT as generation rapidly increased due to an increase in demand. Maharashtra Minister for energy states that there has been a shortage of power to the tune of 3500 to 4000MW and blames CIL for the shortfall. On the other hand, the CIL maintains that "Had the power utilities maintained the CEA prescribed normative stock of 22days the situation could have been avoided." But power stations failed to build up stock during the monsoon. The state-owned power stations have no financial ability to stock coal for 22 days during the summer and monsoon periods. The CIL has fixed a production target of 670MT during the current financial year but off-take is expected to be The monsoon period is almost over. It is expected that it would be limping back to normalcy by March 2022.

The Government of India has taken steps to tide over the power crunch prevailing in the country. The guidelines issued to state governments not to misuse electricity taking undue advantage. States are directed not to sell power to IEX (Indian Energy Exchange) or not schedule this unallocated power supply, be temporally reduced or withdrawn or reallocated to other states. Generally, 15% of the power of the central sector is reserved as unallocated power which is distributed among states as per fixed formulae. The CIL has been asked to speed up production and dispatch of coal on a priority basis to power stations. The pace is taking momentum, planned to increase supply from the present 1.7 MT to 1.9 MT on daily basis. The dispatch of coal on the 9th of October 2021 was 1.92MT against the total consumption of 1.87MT. The Government has given clearance to private or captive miners to sell 50% of its coal to power stations to tide over the situation to meet the shortfall. The CIL directed its subsidiaries, other collieries to prioritize dispatch of coal to power stations and asked to refrain from E-auction. Power stations are advised to blend 10% imported coal with Indian coal. The CIL supplies about 2.5 lakh of coal to non-power industries, now it has been temporally suspended until further notice.

The chief reason behind the power crunch is the rapid growth of economic and manufacturing activities after the second wave of the pandemic. Daily consumption of electricity crossed 4BU per day. Due to the sudden uptick of industrial activities in the industrialized states like Maharashtra, Gujarat, Punjab, Tamil Nadu etc., are facing an acute shortage of power. These states experience an increase of demand up to 14% to 20% in the last three months which the planners could not visualize in advance. On the 6th of October peak demand recorded was 7.8GW. Small players in the Aluminum, Iron and steel industries and small manufacturers are likely to suffer. General consumers may face higher electricity tariffs.