India’s ‘unprecedented’ coal shortages cripple power generation


Hit by soaring global coal prices and transportation costs, several Indian coal-fired power plants are facing critical coal supply shortages that have forced some of them to cut back on their electricity. Fearing an energy crisis, the Energy Ministry recently ordered hydropower producers to postpone scheduled maintenance until October. The Coal Ministry, meanwhile, this week released a broad reform program that will boost coal supply but also prepare India’s coal sector for a new role in a low-carbon future.

New Delhi-based government power system planner, Central Electricity Authority (CEA), in its daily coal inventory report for October 5, suggested that 106 of the 135 thermal generators with affected coal “bindings” are suffering. of “critical” or “supercritical” carbon. stock-outs. Supercritical shortages are total stocks of less than three days of coal, while critical shortages are stocks of less than five days. According to the CEA, while stock requirements vary by region and plant, they generally vary from 15 days to 30 days, and on average 21.2 days. As of October 5, the actual average for “all India” stocks was four days.

According to the CEA report, at least 17 plants, for a total installed capacity of 19 GW, have no days in stock. Another 81 factories, with a combined capacity of 102 GW, had less than five days in stock. The crisis mainly affects non-mine power plants, which source coal by rail from mines located more than 1,500 kilometers away. A total of 119 headless factories, or a total of 129 GW, had a total stock of about four days. However, 16 mining plants, which are being built near the coal mines, are also struggling with just five days of total inventory.

The CEA cites several reasons for the supply crisis. These range from linkage assignments that are flexible or do not match plant capacity, “regulation” of the plant’s coal supplies, poor inventory management, and limited supplies due to “unpaid contributions”.

But many factories also say they are implementing cuts from coal importers, who are reeling from rising global coal prices and freight costs. Asian benchmark coal prices have skyrocketed in recent months due to higher demand as countries open up their economies. The tightening supply of coal to generators in China – which faces similar electrical pressure that stems in part from a trade stalemate with Australia – has also intensified competition for imported coal. As the second largest importer of coal in the world (and also a major producer and consumer), India sources mainly from Indonesia, Australia and South Africa.

In response to the shortages, Coal India, a public entity that supplies more than 80% of the country’s national coal, says its production reached 40.7 million tonnes (MT) in September. The increase, limited by the rainy season, is marginal compared to the 40.5 MT produced by Coal India in September of last year. The entity is said to have plans to gradually increase production to reach 1 billion tonnes of production by 2024.

Coal Ministry announces sweeping coal sector reforms

Striving to stem the emerging crisis, Indian Ministry of Coal on October 4 announced that it had finalized an “agenda document” that will apply until 2022. The agenda contemplates reforms that will “address existing and emerging challenges in the coal sector and align well on emerging technologies and the drive to diversify the coal sector “. Although the program covers the entire coal sector, it will give priority to “orienting the coal sector towards new technologies while focusing on core competence and ensuring set production targets”, including Coal India’s ambitions to produce 1 billion tonnes by 2024.

At will reforms apply to resource exploration, enrichment, mining security, marketing, coal pricing in coal mines, coking coal use, land acquisition and exports. It also includes a “strategy to boost coal production from auctioned mines,” the ministry said. The program’s forward-looking initiatives include exploring the ‘monetization’ of legacy mine sites and power plants and using digital technologies, including artificial intelligence, data mining and drones to more effectively achieve goals. sustainable development. Longer term (in what is described as a “futuristic agenda”), the ministry will explore technologies for converting coal to produce syngas, hydrogen, liquid fuels, chemicals and fertilizers. The ministry also said it expects Coal India to “diversify its activities and explore the prospects of sunrise [solar] industries, electric charging stations, electric vehicles, etc.

Energy ministry asks generators to stay online

The milestone is notable for India, which relies heavily on coal to fuel its economic growth. Despite recent ambitions to increase its carbon-free resources, the country’s total installed electrical capacity was 52.6% coal (and 1.7% lignite) in August 2021. About 6.5% was gas. But while renewables and hydropower accounted for 37.9% of its total installed capacity of 287 GW, non-hydropower renewables generated only a fraction of the country’s total power last month. Thermal electricity production accounted for nearly 80% of total production, followed by hydroelectricity at 17% and nuclear at 3%.

Source: Central Electricity Authority

Recognizing the important role of coal in ensuring reliability and determined to avert an electricity crisis amid the “unprecedented” coal supply problems, the Ministry of Power in September ordered more than 40 large hydropower producers to postpone the scheduled maintenance of their hydropower plants until September and October 2021. He also asked an agricultural council to review its water reserves for irrigation purposes.

It is estimated that a significant capacity of hydropower plants may have to reprogram their maintenance schedule, ”wrote RP Pradhan, director of the Ministry of Energy, in a September 7 letter to the utilities. Pradhan also noted that the ministry was working to closely monitor the position of the coal stockpile and allow emergency response if needed. The government’s reliability efforts are led by a ‘core management team’, which includes representatives from the Ministries of Energy, Coal, Railways, CEA, Coal India and The public grid operator Power System Operational Corp. (POSOCO), he said.

Sonal Patel is a senior associate editor of POWER (@sonalcpatel, @POWERmagazine).

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