Impact of Coalgate on power generation in India

The newly-elected Modi Government might be leaving no stone unturned to ensure uninterrupted power supply in every household but issues like poor coal production in thermal plants are creating hurdles in its way. Union Power Minister Piyush Goyal on Monday said that half of India's thermal power stations are left with a week long coal supply. He said that 26 out of 100 coal-based power plants in India had "super critical coal stock" to meet requirements for less than four days.

At the same time, Goyal maintained that the new Government has inherited the problem which resulted from the lack of vision of previous Government and scams during its tenure. While saying so, the Power Minister was very much right. The coal scam not only amounted to loss of Rs 1.86 lakh crore to the exchequer but also, to much extent, responsible for the power crisis which the country is facing today.

It is well known fact that more than half of the country's electricity generation is coal based and there is no shortage of coal mines in India but power industry always suffers from coal shortage. Gap between demand and supply of coal is huge. This gap was 35 million tonnes in 2007 and nearly about 83 million tonnes in 2012. India couldn't produce 15.1 billion units of electricity due to non-availability of coal in 2012-13, contributing to a power deficit of 11 per cent and thus, hurting economic activities.

Reasons for power crisis?

India holds fifth largest coal reserve in the world (280 billion tonnes). Of this, 110 billion tonnes are "proven" reserves. But even then, our coal production falls short of actual requirements and India needs to import coal.

The reason for the sorry state of coal production in the country could be many including lack of coordination between Government departments, denied environmental clearance, land acquisition issues, delays in Government approvals and most importantly the coal scam. Union Minister Goyal recently said that the coal mining has adversely affected in the country due to coal scam and today, the situation is such that 65,000 MW of power generation projects are completely shut in the country.

Of the contentious 142 blocks that have been allocated since 2004, only one has commenced production. Among the five companies that have been charge-sheeted by the Central Bureau of Investigation, not even one is producing coal.

Gap between demand and supply of coal is huge

The situation is such that nearly one-third of country's population has no access to electricity and the demand-supply gap is increasing day by day. The demand for coal is around 650 million tonnes. But only 538 million tonnes of coal is produced by State-run Coal India every year. In April-June, Coal India supplied 88.66 million tonnes to power companies against a target of 101.61 million. Because of this shortage, most of the power-generating companies are functioning at half of their capacity.

Now Modi, who repeatedly highlighted the issue of power shortage in most of his speeches during electioneering, is at helm of affairs at the Centre, we could hope things will be more synchronised and focus will be laid on providing 24X7 power supply to every house hold.