Why are we facing an energy supply crisis?
The good news is that our economy has rebounded strongly, and we are seeing a 15% increase in electricity demand. Coal production capacity has grown but not as fast as it takes nearly three years to start a mine. At the same time, international coal prices jumped from about $40 to $140 per ton. All of our imported coal-based plants, with a capacity of about 17,000 megawatts, are becoming very expensive. Coal available for blending has dropped suddenly – from about 24 million tons in 2019 to about 8 million tons last year. The complete shortage is 16 million tons. We’ve asked gencos and states to go back to blending, at least 10%, even though I’m claiming 15%.
Have the ministries of electricity, coal and railways failed to see the situation?
No one could have predicted the sharp decline in imports. It happened due to the closure of coal mines in some countries, and the international demand for coal rose. Gas prices rose and left 25,000 megawatts (gas-powered capacity) idle. Producing electricity from gas, which is around $40 per unit, will make electricity cost around Rs 23-24 per unit.
Are you getting the required number of pistons?
In some areas, no. On a macro level, I would need about 460 stacks, the current average could be 425 or 430. We ask gencos (generators) to buy pistons under the “own rake” scheme, which will help.
when India charcoal ramp up production?
It takes time to start a coal mine. So, I don’t see Coal India suddenly expanding its capacity. It is not feasible. If all states and junks import charcoal for blending, as they did previously, we’ll see stabilization. Imports can not be dispensed with. As more renewables start being added, the situation will improve.
Does this mean that the energy shortage will continue?
There is currently no shortage of coal for power generation. If we don’t raise supplies, I will run into a coal shortage in the monsoons. I’m not worried for today, I’m worried about the monsoon. We have a reserve stock of about 19.5 million tons. If I had 35-40 million tons, that would be great.
How prepared are we for July and September when energy demand will rise and coal production will fall?
Basically, this is the message we’ve been sending to the states. Some countries say they will not import. If they don’t, we won’t be able to replace it with local supplies. If you don’t import, you have to move on to load separation. Import does not mean that the price of energy will rise from Rs 3.50 to 8. If the price today is, say, Rs 4 per unit, it will rise to Rs 4.25 if you mix only 10%. I have written to some countries noting this. Second, we also set higher targets for captive coal miners, to increase production but they did nothing. There are also some states that got coal under RCR (railway) status but raised very little.
So, the cost of energy to the consumer will rise?
From 4 rupees to 4. 25 baisa or 4. 50 baisa.
#Coal #production #lags #energy #demand #Singh #Times #India