Coal Crisis in India Hits ‘Critical’

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By Dave Forest,

Things never look that bad. Until they are.

Like India’s coal sector. Where recently, many analysts have been suggesting that demand is going remain subdued – in line with the global sector in general.

But for anyone watching the numbers, it has been clear that major problems are coming in coal supply here. And last week, news emerged showing that the issues in the coal sector have hit full-on crisis levels.

Platts reported that India’s main power producer NTPC has been forced to shut down 46% of its coal-fired capacity across the country due to insufficient coal supplies arriving at these power plants. Meaning a big loss in total electricity supply, with 16 gigawatts now idled.

The majority of the outages are coming in northern and central India where coal demand for power generation is running 1.5 million tons per day. Yet actual delivered supplies have been just 1.3 million tons per day recently due to problems with production and delivery from the country’s major coal miner, Coal India.

That has led to some terrible statistics at India’s power plants. As of Sunday, 56 of the country’s 100 coal-fired facilities were running at “critical” levels of coal supply, with less than 7 days of inventory on hand. And 29 of those plants – representing nearly a third of the total fleet – are at “super critical” levels of less than 4 days’ inventories.

And just when low levels of hydropower generation, following light rainfalls during a weak monsoon season, is causing greater reliance on coal-fired power. And it’s exposing the considerable weaknesses in the supply chain for this sector.

For its part, power generator NTPC is moving to fix the situation. By importing more coal. The company announced last week it plans to increase its thermal coal imports by 63% this coming fiscal year, to a total of 17 million tons.

With domestic coal production not looking to rise anytime soon, this could become a familiar pattern for other Indian consumers. At least, if the country wants to avoid a repeat of the national blackouts that took place in 2012. By Dave Forest,

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  3 comments for “Coal Crisis in India Hits ‘Critical’

  1. September 3, 2014 at 3:41 pm

    Let’s sell them ours since we don’t seem to want it. I mean, even if we’re still using coal we STILL don’t want our own coal. Some areas of the USA IMPORT coal due to lower transportation costs.

    And even then, environmentalists are trying everything they can to stop us from exporting coal.

    If you’re a coal miner, get out of the business. Everyone hates you. God forbid you try to earn a living to support your family.

    • Joe
      September 3, 2014 at 4:57 pm

      Yeah, gee whiz, how come we can’t burn more of our coal [and oil] more quickly? I mean there’s no point in saving any for later, right?

      • Bill
        September 5, 2014 at 7:59 pm

        What makes you think our coal is being saved for our progeny?

        Do you really think people are lending to this country without collateral to back up the loans?

        All the coal, oil, timber, metal ores, and land which are being locked up are earmarked for eventual use by our lenders.

Comments are closed.