We have seen Power Cuts in recent days in our city. What do you think why is that happening?
The reason behind these Power Cuts or blackouts is Coal shortage in India. All the power plants, which runs on Coal are having coal stock issues.
Delhi’s chief minister, Arvind Kejriwal, wrote to the prime minister, Narendra Modi, that the capital “could face a blackout” if power stations did not receive more coal.
States including Rajasthan, Jharkhand and Bihar have been experiencing power cuts lasting up to 14 hours.
The coal shortage is threatening the global economic
recovery. Blackouts could spread from China and India to all
the emerging economies still mostly reliant on coal. As supply can’t be ramped
up in the near term, the shortages could worsen as energy demand rises
with winter’s arrival. That may trigger another
Coal consumption of India and China
Total coal consumption of India is around 966 MT. with the largest share being thermal coal (including lignite) for electricity generation (700 Mt), followed by thermal coal for non-power applications (245 Mt).In coal consumption India is second after China. Total coal consumption of China was 3948 MT while production was 3827 MT.
In last year, India imports 215 MT coal from Indonesia,
Russia and others.
Why India is facing Coal Shortage?
After corona virus hit in the first months of 2021 Energy demand rises upto 13% in india. Due to this sudden spike in energy demand coal india has increased its production to overcome this demand. But in monsoon season many coal mines hit by rain. That leads to shutdown production and Increased logistic cost. Although Coal India Ltd. Has increased the production of coal on domestic level, Rising prices of imported coal creating difficulties to indian firms to run their Operation.
China, the biggest consumer of coal, is facing a severe shortage, with many reports suggesting that the country has impose restriction on power use in homes and shops.
China is also the biggest producer of coal. With its large-scale domestic industries facing a power crisis, China has effectively put restrictions on the export of coal and is competing for imported coal in the international market.
Coal prices jumps over 100% in international market. In one year coal prices crosses from 89 USD/T to 240 USD/T. This is because of high demand from across the globe and low production. In recent months Rain has become the major culprit in production cuts in many coal mines.
What is the current situation of coal stocks in thermal power plants?
According to the Central Electricity authority (CEA), 16 of India’s 135 coal-fired power plants had zero coal stocks as of September 29. Over 80 per cent of the plants had less than a week’s stock left, while over half of them had stocks that would last fewer than three days.
India imports around 300 million tones of coal, primarily from Indonesia, Australia and South Africa. Coal India produces over 600 million tones of coal for domestic consumption. Now, with a domestic crunch, India’s reliance on Indonesia for coal import has increased.
Could Coal Crisis in India and China bring Global
The Blackouts can go beyond China and India’s Territory. If coal shortage is continued it will decreases production in Manufacturing Units which are running on electricity. China is the Major contributor in small scale products which are manufactured in china and if any shutdown happen in these manufacturing units, it leads to decrease in global supplies.
The 2.5 billion people among 8 billons affected due to Coal crises then it could spread over other countries. China have also seen Debt crisis in Infra sectors like “Evergrandes Debt crisis”.
So Coal shortage and Debt Crisis in Infra sectors could
be the possible reasons in near future global recession.