Coal demand rose following the second Covid -19 wave, and now, the nation is facing a severe shortage of natural resources. This shortage may trigger a power crisis in the nation. More than half of the Coal-fired power plants went on alert for outages. The power plants had an average of four days’ worth of stock of fuel at the end of last month. The stock was the lowest in years. Coal produces almost 70% of electricity; spot power rates have surged.
Coal inventories at Indian power plants fell to around 8.1 million tons at the end of September. About 76% less than a year earlier, according to government data. Average spot power prices jumped more than 63% in September to 4.4 rupees a kilowatt-hour. India’s stellar growth rate will be affected because of the rising electricity bills. In March 2022, it is forecasted that the economy will expand 9.4 percent, which would be the fastest pace among major global economies.
India is facing an energy crisis :
India faces two significant challenges: soaring electricity demand as industrial activity rebounds after pandemic curbs were lifted and a slump in local coal output, like China. “Until supplies stabilize completely, we are likely to see power outages in some pockets. While customers elsewhere may asked to pay more for power,” said Pranav Master, director for infrastructure advisory at credit rating firm Crisil Ltd. The country meets around three-quarters of its demand locally, but heavy rains have flooded mines and critical transport routes. Already, the government is drawing up guidelines in case it needs to bring idle power stations back into action. The impact on consumer prices would show up a few months later. Distribution utilities get regulatory approvals to pass on the cost. However, it is a tough time for the government and people to deal with the crisis.