- India faces electricity crisis, as coal stocks run low
- Government working towards ramping up coal production
- Stakeholders call for urgent action
India is facing an acute electricity crisis as the country’s coal stocks run critically low. With 70% of electricity generated in India sourced from coal, the low coal stock will have a disastrous impact on its electricity sector. Electricity consumption in the country has grown by almost 17% as its economy is gradually picking up from its second wave of the COVID19 pandemic. In addition to low coal stocks, global coal prices have increased by up to 40%.
Economist Dr Aurodeep Nandi has stated that “We have seen shortages in the past, but what’s unprecedented this time is coal is really expensive now,”
“If I am importing expensive coal, I will raise my prices, right? Businesses at the end of the day pass on these costs to consumers, so there is an inflationary impact – both direct and indirect that could potentially come from this,” he added.
Electricity retail prices have surged in the cost of electricity will be felt by consumers. Ms Zohra Chatterji, the former Chief of Coal India Limited, raises the alarm on the impending crisis and says the country must begin to look into renewable energy as an alternate source of electricity to sustain economic growth.
“Electricity powers everything, so the entire manufacturing sector- cement, steel, construction – everything gets impacted once there is a coal shortage,” Chatterji says.
The Indian government is, however, working to increase coal mining in state-owned utilities to bridge the supply and demand gap for electricity generation.