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HomeEconomyPower outage risks increase as India's coal stockpiles plunge to 3-year low

Power outage risks increase as India’s coal stockpiles plunge to 3-year low

Heavy rains in mining regions are worsening coal supply crisis. The dwindling supplies also come at a time when electricity consumption has been strong due to revival in economic activity.

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New Delhi: Coal stockpiles in India plunged to the lowest in nearly three years, putting more than half the country’s coal-fired generation capacity at risk of outages.

Heavy rains in India’s largest mining regions are worsening the country’s coal supply crisis. Flooded mines and water-logged roads have slowed down operations at state miner Coal India Ltd.’s mines, according to technical director Binay Dayal, choking supplies to power stations. That’s pushed stockpiles of the fuel to 9.3 million tons, the lowest since October 2018, data from the Central Electricity Authority show.

Fossil fuel produces nearly 70% of India’s electricity and the crisis has been aggravated by the high prices of overseas coal, which has led to some large power plants that burn mainly imported coal to idle much of their capacity to cut losses.

The dwindling supplies also come at a time when electricity consumption has been unusually strong, fueled by a revival in economic activity. Power use rose 10% in July and 18% in August, an unusual increase during these rainy months when construction activity slows and milder weather cools demand.

Coal stockpiles at power plants have declined 73% over the past year, leaving nearly 121 gigawatts of generation capacity with stockpiles of a week or less as on September 21, according to government data.—Bloomberg

Also read: SC revives a 2009 dispute over power supply between Adani company & Gujarat power body


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