Several states in India staring at huge power shortage during coming months on fuel supply crisis

A peaking summer, an industrial revival, and shortage of fuel is leading to a huge power crisis in the country. Even as the government claims it is pulling out all the stops to avoid a nation-wide power crisis, worsening of fuel stocks at thermal stations is likely to cripple electricity supplies in the weeks ahead. 

Electricity shortage rose to 80 million units (MUs) on April 7, close to an all-time high of 82 MU seen on October 12, 2021, and up from a daily average of just 19.7 MU in March. Supply shortage during peak hours was 6,124 mega watt (MW) on April 7, even higher than the recent high of 5,591 MW (October 12).

Andhra Pradesh, Madhya Pradesh, Bihar, Jharkhand, Punjab, Haryana, Rajasthan, Telangana and Uttar Pradesh. Maharashtra, Gujarat  have already started witnessing temporary power outages in the last few days. Tamil Nadu, the most industralised state in the country, is trying hard to avoid load shedding by letting the state-run utilities buy expensive power – from gencos under short-term arrangements and even from the spot market.

Clearly the current situation is a fallout of a high prices of imported coal and gas, which has increased the pressure on domestic coal suppliers. The current level of 24.5 million tonnes of coal stocks at power plants would suffice for 12 days, at the current level of consumption.

The government has increased domestic coal production and transportation by the railways are being increased to the maximum level possible in the short term. State-owned  power companies like NTPC and DVC have been allowed to import coal for blending.

Around 9 million tonnes of coal will be imported by June, without putting any additional pressure on transportation of domestic coal by the railways. Imported coal prices, which used to be in the range of $50-60 per tonne, have been ruling consistently above $100 per tonne for the last ten months. The current prices are even higher at $150-160 per tonne. Similarly, the landed cost of LNG, which used to be available at $8-9 per mmBtu, have recently been very high at around $40, owing to the Russia-Ukraine war.

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