Normalising economies are leading to rampant demand for coal globally – report

Care Advisory & Research said economies are coming back to normalcy leading to rampant demand and that is driving energy prices reflecting in the demand-supply mismatch.

In an interview with CNBC-TV18, CARE’s director Tushar Shah said, “Australia and Indonesia are the two countries which are the biggest exporters of coal. India is one of the largest coal importers. So definitely, assets or companies in those geographies are likely to have the benefit of inflated prices.

The global energy shortage is echoing around the world and India is no exception. Coal stocks at the various power plants in India are at critically low levels. Several states are reporting power outages and are sounding the alarm bells over possibly more possible blackouts.

The chief ministers of Delhi and Andhra Pradesh have written to Prime Minister Narendra Modi seeking his intervention. Union home minister Amit Shah held a meeting with power minister RK Singh, coal minister Pralhad Joshi along with other senior officials to discuss the current supply situation and coal shortage hassles.

India’s thermal power plants currently have an average of four days worth of coal stock against a recommended level of 15-30 days, with a number of states highlighting concerns about blackouts as a result of the coal shortage.

A number of states including Delhi, Punjab and Rajasthan have raised concerns about potential blackouts as a result of low coal inventory at thermal power plants. Rajasthan, Punjab and Bihar have already reported load shedding as a result of thermal power plants operating at low capacity.

A sharp increase in the international prices of coal due to a shortage in China and low accumulation of stock by thermal power plants in the April-June period have also contributed to the coal shortage. Heavy rains in coal bearing areas in September had also led to a slowdown in the supply of coal to thermal plants. Coal and lignite fired thermal power plants account for about 54 per cent of India’s installed power generation capacity but currently account for about 70 per cent of power generated in the country.

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