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Coal supply crisis results in load-shedding in India

2017/10/13 12:00

 

By Kamlesh Trivedi

 

The ongoing coal supply crisis for power projects has turned into a huge nightmare for the government, impacting power distribution and transmission in the Western states of Gujarat and Maharashtra which consume the highest amount of power in India. Maharashtra state has been facing shortage of around 2.5gigawatt of power supply due to the ongoing coal supply crisis whereas in the case of Gujarat, the gap between demand and supply has been estimated at around 3.00GW.

In the case of Maharashtra state with Mumbai as its capital city, the current requirement for power was estimated at around 16.5GW as against the supply available at around 14.00GW. In the case of Gujarat state, demand was estimated at around 17.00GW as against the supply available at around 14.00GW. The gap between the demand and supply of power is expected to widen further in Gujarat during the next few weeks as some of the existing coal-fired thermal power units of Tata Power, Adani Power and couple of units of National Thermal Power Corp (NTPC) were on an unscheduled outage for the past few days.

Both, Gujarat and Maharashtra states along with a few other states in India have started planning for load-shedding or power cut to deal with the looming power crisis. Early this week, Maharashtra state implemented load-shedding for around three hours in a day in some of the areas, around Mumbai after a gap of almost five years. In Gujarat, the government may have to implement load-shedding as farm sector consumers have resorted to overdraw of power while power generation has been constrained due to the ongoing coal supply crisis.

The coal supply troubles had started essentially because of flooding of coal mines in the eastern most state of Jharkhand sometime late in August. However, the situation could have improved if appropriate steps were taken by the coal supplying companies on time. Unfortunately, the state-owned coal supply companies were not prepared for this kind of eventuality and had hardly any inventories built up to deal with the supply crisis.

Likewise, thermal power companies, using coal as fuel, were also to be blamed for not maintaining coal inventories on their part which eventually forced them to shift to gas-fired power generation. With a sustained rise in RLNG prices, gas-fired power generation has become so expensive that power companies believe that the demand will start shrinking in the coming weeks as few among end-users could afford to buy high cost gas-fired power which uses RLNG delivered at around $10.00 and above.

Power companies have been instructed by the government to bring back power generating units under maintenance shutdown as early as possible. However, until the coal supply situation improves drastically, a sizable volume of idle gas-fired power capacity would be used for power generation by the power companies and RLNG would continue to replace coal as long as it’s viable.

 

 

 

 

 

 

 

 

 

 

 

 

India : Energy Desk  Kamlesh Trivedi  +91-98795-50717
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