Stung by the criticism and facing a rude wake-up call, Government of India is now likely to build and maintain a “strategic” stock of natural gas and imported coals that can tide over at least one month’s time period of supply disruption.
India, which has the fourth largest reserve of coal, is also the second largest importer of the same which is primarily used in the generation of electricity. As much as 70% of India’s electricity generation is met by the more than 130 coal dependent power plants. A majority of these power plants are facing difficulties in meeting their targets because of a shortage of coal due to an increase in the price of imported coal and the domestic monsoon that has affected the quality of coal needed for power generation.
Power Secretary Alok Kumar cited the example of Russia, which curtailed coal supplies to its consumer countries in Europe on account of supply crunch and to meet its domestic demands. “So let us start thinking and discussing about keeping a strategic reserve of gas and imported coal, so that economies are able to tide over these supply shocks for about a month or so,” Kumar said while speaking at the South Asia Power Summit organised by the Confederation of Indian Industry.
The shortage of coal supplies at power plants had led to a large-scale criticism of the government machinery for not being able to anticipate the situation. On 9 October, Delhi Chief Minister Arvind Kejriwal wrote to Prime Minister Narendra Modi stating that Delhi was going to face a blackout due to shortage of coal as there was only one day of coal stock in Delhi instead of 30 days which the power supply companies are supposed to keep.
On 12 October, Prime Minister Narendra Modi conducted a meeting with Coal Minister Prahlad Joshi and Power Minister Raj Kumar Singh to look for a solution to resolve the crisis. Later, Joshi announced that coal supplies to India’s power plants will be increased to 2.2 million tonnes (mt) daily to help fuel stocks reach 10 mt by 2021 end, from the present levels of around 7.5 mt. Apart from power plants, coal is used by steel and aluminium plants.
Singh, an IAS officer of the 1988 batch, who joined the ministry in February this year, said that in the coming ten years or more, all economies, especially the major ones, will be dependent on fossil fuel supplies for base load and for grid balancing. “We would never be able to insulate ourselves from these supply shocks of the imported fuel. We have 17,000 MW capacity based on imported coal and if imported coal prices go high, that capacity is out. India has 24,000 MW of gas power plants. They are also virtually out. So, the high prices will make energy security very challenging if we don’t have a well-thought out strategy.”