Out of total 135 coal fed power plants, more than 50% are on danger to shut down. India is dependent on coal to generate 70% of the total energy demands. This is a major threat looking at the coming festive season and post pandemic economy revival.


Alarms were rung from the month of February 2021. After mammoth second wave of Covid-19 pandemic, demand for power shot through the roof. Alone in the post 2 months of August and September the power consumption jumped 17% compared to same period of 2019.

The second reason for the same is the rising prices of coal in global market and India’s decrease in imports of coal. India is said to be the 2nd largest coal importer following China and is 4th largest coal reserve in the world.


According to DR Aurodeep Nandi, India Economist and Vice President at Nomura,” We have seen shortages in the past, but what’s unprecedented this time is coal is really expensive”.

Importing more coal to make up for domestic shortage is not an option at present. If we import expensive coal, the company will rise up the price to provide the power. Retail inflation is already high as everything from oil to food has become expensive.

If this persists, Asia’s third largest economy will struggle to get back on track as electricity powers everything, so the entire manufacturing sector- cement, steel, construction – everything gets impacted once there is a coal shortage.


It is not clear how long the situation the country is in will last but is is said that with winter’s approaching, the demand for the power could fall. Currently a dynamic situation is going on where if gas prices dip today, there could be switch to gas.

Reference: BBC News