Global Mining: Blackout fears loom as India’s coal shortage situation worsens

India is on the brink of a major power crisis as several power plants are running out of coal stocks.The number of thermal power plants with less than seven days of coal stocks has risen to 56 this week from 52 last week, government data showed on Wednesday as reported by Indian Firstpost news wire.

India’s 100 thermal power plants had enough coal overall to last six days on Sept. 1, unchanged on week, the Central Electricity Authority said.

The stock levels are the lowest since mid-2012, when hundreds of millions of people were cut off in one of the world’s worst blackouts.

According to a report in the Hindustan Times, India’s largest power producer, NTPC, is running its plants at over 80% capacity compared to an average of 62% last year. The power producr has coal stocks of less than a day at itsplants at Badarpur, Dadri and Jhajjar all of which feed Delhi and NCR.

Moreover, a sharp fall in output at a large power plant due to a coal shortage may lead to power cuts in some areas, underlining the challenge the new government faces in overhauling the sector and its creaking infrastructure.

Adani Power has shut down six generating units at its 4,620 MW plant at Mundra in Gujarat citing payment default by Haryana, while Tata Power has closed down two units of its 4,000-MW plant there due to technical snags.

On Tuesday, large parts of Mumbai plunged into darkness as an overburdened transmission corridor refused to take more load, imposing loadshedding of 300 mw on the city.

Generation from Tata’s Trombay and hydro plants and Reliance’s Dahanu power station is around 1800 mw while demand during peak hour is 3300 mw, causing 1000 to 1500 mw of power to be bought from outside. On Tuesday, demand was the highest at 3350 mw while supply from within the city was 2950 mw. Distribution companies were forced to impose rotational load shedding in many parts of Mumbai.

“Dark office in Mumbai. Lights out in the whole area. The coal crisis is beginning to literally show its dark side. A threat to the India story,” tweeted Anand Mahindra, chairman and managing director, Mahindra Group, on Tuesday.

India, which uses coal to generate more than two-thirds of its electricity, is struggling to provide enough power to meet rising demand. The power sector has not been able to obtain sufficient domestic coal and has become reliant on costlier imports.

The states that could be hit with blackouts include Maharashtra, Rajasthan, Gujarat and Haryana.

Last week, the Supreme Court declared scores of coal block mining allocations made since 1993 unlawful and arbitrary. If it cancels the blocks a India may have to import even more coal to keep the lights on. Power Minister Piyush Goyal on Wednesday said that the government has sped up work on increasing coal production.

The government has also put in a plea to the apex to consider exempting 40 coal blocks which are already in production and produced 37 million tonnes of coal last year and are expected to produce 50 MT this year.

Another six coal blocks are ready and their lease for mining is to start.

Prime Minister Narendra Modi stormed to office in May on promises to boost the economy and improve basic services for millions of Indians who still lack running water and electricity.(On Firstpost.com)