For a common man struggling with power cuts and debating all about coal shortages in the country, any reason seems enough convincing of such incongruity.
Although the government seems to prefer being in denial or the experts suggest of other reasons, this lack of supply to fulfil the demand for coal, is conflicting with country’s interest.
Definition of shortage for a power plant:
In an ideal condition, a power plan may have coal stock for 15-30 days, that varied due to different factors. Any time, this stock goes below a week’s inventory and that is indeed a threat for energy security of the country.
This marked shortage of coal has been observed in India during 2014 and 2018 too.
However, the question is whether there is shortage of coal in India, the lack of extraction or inconsistent supply.
According to an Environmentalist: “The situation is such that there is stock at the coal mines, but it is not there at the plants.”
According to the Ministry of Power, this can be attributed to a number of reasons: recent revival of economy, heavy rains and floods in coal mines making its extraction and transportation difficult.
The Ministry of Power explains: “The daily consumption of electricity has crossed beyond four billion units per day and 65-70 percent demand is being met by coal-fired power generation only, thereby increasing dependence on coal”.
Certain additional factors include legacy issues with coal related dues by several Indian states like Maharashtra, Rajasthan, Uttar Pradesh. Tamil Nadu, Rajasthan, Madhya Pradesh etc.
Other external factors include exorbitant prices of imported coal, making it even difficult for power plants to acquire coal from alternative sources than Coal India Limited (CIL) etc.
Focusing on ‘Import substitution’ and ‘Atmanirbhar Bharat’, the Central government instructed the thermal power generators to look for domestic coal but when the shortage worsened, they have been notified to import coal for at least 10 percent blending with available domestic coal.
Reforms in Indian Energy sector:
The current Government has aimed to undertake domestic coal production to approximately one billion tonnes by 2024.
When India makes and treads its own path for a $5 trillion economy, as per our Honorable Prime Minister, this cannot happen without strong Mining and energy sector.
For this, a few policy measures were introduced, like Mining reforms easing up the rules for prospection cum licensing along with greater room for players other than CIL to help India uncover its potential for this dark treasure.
Although the boost to Renewables in our country as well as others in the world, has caused coal and polluting energy sector to starve for investments.
“We envisage a fast-paced renewable growth from 100 gigawatts to 450 GW by 2030 – if that happens a significant part of incremental demand will be met by renewables. In that case, there may not be enough demand which could justify one billion tonnes of coal.”
Unearthing the real reason behind the new coal crisis?
As per a combination of 45 available estimates, India’s real GDP has derived to be grown by 21 per cent during April-June 2021.
Economists have projected India’s GDP growth for current fiscal year at 9.2 per cent. The reason being attributed to booming manufacturing performance and recovery from the pandemic.
However, it was simultaneously indicated that consumption share in GDP has reduced, indicating a greater impact on public pockets, post the second wave.
“Manufacturing and construction were the key drivers of the pickup in GVA growth in Q1, whereas on the expenditure side, private consumption and investment powered the turnaround in the GDP performance,” explains an Economist.
Alongside, India’s growing needs, several different countries of the world are experiencing energy crisis, bigger than they have witnessed in years.
However, this alone, will not have the ability to cause such a notable coal crisis.
Coal crisis: A bigger logistic issue
“Many state PSUs (public sector undertakings) owe huge amounts to CIL already. So, this means the problem is of funds as well”, explains a lawyer associated with the issue.
Additionally, “especially railway and the lack of a dedicated freight corridor are also the reasons behind the shortage of coals plants in some states – especially those who don’t have any coal mining within their territory and depend on mines in other states hundreds of kilometres away.”
Country shall strive through the crisis but on the cost of Environment?
Environmentalists have legitimate concerns regarding the narrative of “indispensable importance of coal” for the Indian economy and fear regarding power cuts and shortages.
EIA already has suffered enough blows, thanks to its savior (Supreme Court) that gave it back its teeth.
According to the Environment Activist: “This (shortage) has nothing to do with mines or the urgent need for new mines. However, fear is being spread that there will be a blackout to set the stage for diluting the present laws and regulations governing the coal sector and give a bigger pie to private players without addressing concerns of the communities affected.”
He adds: “Once that is done, the private companies will be able to take over the land even before compensation is fixed for people whose land is being taken away.”
“According to the provisions of the coal-bearing act, the land stands vested with government companies but after amendment, this door will be opened for the private companies as well.”
“On the pretext of a coal shortage, the government is only going to dilute the safeguards that we have to protect the environment or the concerns of the affected communities.”