- The Indian economy is finally looking up to cheerful times on the back of several activities picking up pace is evident across the country. The pandemic-induced debilitating challenges are appearing to be overtaken by some resolute efforts from the governments, industries, and people alike cannot be disputed. After facing initial hiccups, the vaccination drive is proceeding more than satisfactorily on the back of adequate supplies from the manufacturers contributing immensely to the feel-good factor. Though the dangers of further virus waves lurk around. To sum it up, the overall mood of the countrymen is upbeat as restrictions imposed earlier owing to successive lockdowns are making way for relaxation.
PC: SightsIn Plus
- The GDP growth prospects for the current fiscal too is indicating brighter tides soon after reeling under the impact of contraction witnessed last financial year. When everything appeared proceeding along smoothly comes the worrying bit of news that the country is staring at a coal stock shortage leading to apprehensions about producing the required quantity of power to run crucial industries. As reports emerging suggest, coal stock at India’s power plants as of Monday, 11th October 2021 was 7.2 million tonnes barely sufficient to run for four days. This is way below the buffer stock that should exist to ensure power generation plants are not affected adversely.
- Note that the stock depletion has happened in the wake of supply disruptions in other industrial inputs such as semiconductors. Nonetheless, unlike other inputs where the causes are global in nature, the present low reserve of coal is of our own making. When the economic activity is gaining sustained momentum after dreadful months, the coal shortage might prove to be a dampener in days to come if not addressed expeditiously. The Government of India has offered a set of reasons for the current situation. Chief among them is an unusual spike in electricity demand because of a rebound in economic activity, September rains that disrupted coal production, pricier coal imports, poor coal stocking protocol, and the perennial overdue from state governments.
PC: JULIA PYPER
- Mind you, the reasons are not entirely persuasive because they are inconsistent with both data and normal business patterns. On scrutiny, the situation reflects poorly on two key stakeholders, governments and private power generators importing coal. Now, the monsoon cannot be used as an excuse as it’s an annual phenomenon where disruptions during this period are not uncommon and hence, stakeholders should have been better prepared. Of course, a spike in demand should have been anticipated as well since economic rebound was a given fact. Moreover, the data about thermal plants’ capacity utilization or plant load factor in August and September have not been high enough to warrant coal-stock depletion staring at us now.
- The Government has made reassuring announcements of easing the shortage soon through higher domestic production. Also, it is expected that pricier imports may continue to be a constraint. Thus, there is a case for more flexible power purchase agreements to avoid disruptions because of swings in coal price. Quick actions on the coal stock front should ease the anxieties prevalent. Act now!
