For the past few weeks world is experiencing a series of events that indicates the threat of power security. On 29th Sep, South China Morning Post published the effect of power shortage impacted the SMEs adversely.

However, the reason stated was the new goal set by the Chinese government of Carbon Neutrality kept on the top but it won’t be wrong to say that they adhere to the financial crisis over the increasing prices of coal in the international market.

India has also fallen from the edge as the steep hike in energy demand disrupts the coal supply chain. “The supply crunch is expected to persist, with the non-power sector facing the heat as imports remain the only option to meet demand but at rising costs,” rating agency CRISIL said in a report this week, adding it expected Asian coal prices to continue to increase.

On 3rd Oct, news surfaced in the media stated, “72 coal-fuelled power projects have less than three days of stocks, as of 1 October. Also, 50 plants have coal stocks ranging from 4 to 10 days, and 13 projects have fuel stocks to sustain electricity generation for more than 10 days”

Coal prices in the international market have been shoot around 300%. Although imported coal contributes 7-9% of the current demand in India the supply chain gets disrupted over the global market trend.

Source: Trading Economics

CIL has taken the regulation of the supply chain promptly stopped the coal supply of units having 15days of coal stock. Surplus domestic coal will be diverted to fulfill the shortfall of the 72 critical stocked thermal units.

Steep post-COVID-19 recovery has also seen a rise in energy demand. This session seems to have a rise of 18% growth in power demand, which led to an unprecedented power generation.

“Coal stocks were at a comfortable level of 28.4 MTs at the beginning of the fiscal and even at the end of July coal stock at power utilities was 24 MTs at par with the previous five-year average of the same period. It was in August that stock at power plants fell by over 11 MTs,” CIL said in its Wednesday statement.