A coal supply crisis is brewing in India for the second consecutive year with Coal India Ltd. restricting deliveries to industrial consumers to prioritise power plants. The state-owned miner limited daily supplies to non-power sector users to 275,000 tons, according to an internal letter seen by Bloomberg. That is about 17 per cent lower than recent average daily volumes.
Coal stockpiles at power plants fell Sunday to about 25.2 million tons - short of the coal ministry's 45 million ton target. Coal-fired plants generate over half of all electricity in India; January 31 data pegs the figure at 51.6 per cent.
And with heatwaves already settling in across large swathes of India, demand for electricity is expected to soar, adding pressure on power generators.
Union power secretary Alok Kumar told Hindustan Times this year's projected demand is 215,000 megawatts - well over last year's 200,570 megawatts peak.
More worryingly, fuel stockpiles are already below target as well.
Recorded electricity shortages in March were highest since the coal crisis in October last year, an analysis of data by Reuters has shown.
READ: India's March electricity shortage worst since coal crisis in October
{{/usCountry}}READ: India's March electricity shortage worst since coal crisis in October
{{/usCountry}}Several northern states suffered hours-long outages in October when a crippling coal shortage caused the worst electricity deficit in nearly five years.
Last month Jharkhand and Uttarakhand reported shortfalls, and Gujarat ordered a staggered shutdown of 'non-continuous process' industries, Reuters reported
Andhra Pradesh and Goa suffered deficits several times larger in March than October, data showed.
In Maharashtra coal stocks at plants operated by state-run utilities have plunged over supply bottlenecks even as rising temperatures drive up demand.
READ: Maharashtra power plants face coal crisis as temperatures drive demand
Concerns have been expressed by Punjab, which has flagged the need for power supply - estimated demand is over 15,000 megawatts - during paddy season. It has also asked for an additional 20 lakh metric tonnes of coal at this time.
National capital Delhi - which expects a record 8,000 megawatt demand this summer - is seriously re-evaluating power generation via solar panels, and is hoping individual homes can pitch in.
Also last month the central government urged state-run electricity generators to ensure adequate coal stocks and help by unloading railway rakes as quickly as possible, allowing them to re-load and supply other states.
A single rake can carry 4,000 tons of coal.
With input from Bloomberg, Reuters