Coal Shortage Hits Power Sector Again; How India Can Get Its Production Right


Coal Shortage Hits Power Sector Again; How India Can Get Its Production Right

The power plants are running short on fuel in the country. No, this is not 2014. It is 2018. There is coal shortage. Yet again. There were as many as 26 power plants that are considered “critical” as of October 9, 2018, for want of adequate fuel. In 2014, many thought, and still think, that the smooth auctioning of coal blocks was ‘the coal story’. It was not. The process of auctioning coal blocks was primarily to put in place a transparent mechanism to distribute a natural resource that was very critical. In fact, the real problem in the country was the shortage of coal and the auctioning of coal blocks had minor impacts on coal production.

India sits on an estimated reserve of 300 billion tonnes of coal. Yet, the country was short of coal. Consequent to the opening of the power sector in 2004, the demand for coal suddenly shot up. Import of 21.7 million tonnes in 2006 grew to 131.3 million tonnes in 2014. The gap between demand and supply, which was minimal at the beginning of this millennium, grew substantially. Read more

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