We have a crisis in India, and it is not with the climate. Power plants for the world’s second-largest consumer of coal are running out of stock, leaving a billion people at the risk of blackouts and forcing industries to close facilities.
To resolve the situation, the Indian government has authorized increased importation of thermal coal, removed all import duty on coal, is reopening hundreds of closed coal mines, and has asked existing domestic mines to produce at unprecedented rates. [bold, links added]
The country has even canceled dozens of commercial trains to make room for the freight trains that carry coal.
Coal-fired plants produce more than 70 percent of all electricity consumed by India’s 1.3 billion people.
For the past year, the country’s coal-fired plants have suffered occasional fuel shortages, and the problem has resurfaced.
The Central Electricity Authority’s daily coal-stock report on April 29 showed that 56 plants had no more than a 10 percent inventory reserve with 26 plants having less than a five percent reserve.
To ensure increased deliveries to the plants, the government has resorted to desperate measures. Forty-two trains were canceled in the country to free up tracks for expedited movement of coal freights.
Authorities said the cancelations were indefinite and would not be reversed until coal inventories improve.
The head of the country’s railway department said, “There is a 20 percent rise in the demand and consumption of coal from last year. In the month of April 2022, we have transported 15 percent more coal than we did in April 2021.”
There has also been heightened activity in the import sector, with more states trying to acquire coal stock for their plants.
India generally imports more coking coal, which is used for such processes as steel manufacturing. However, with the increase in electricity demand, imports of thermal coal seem to be overtaking those for coking coal.
In order to facilitate import, the Indian government has now removed all import duty on coal.
The government is also providing import loans to its coastal thermal power plants. This means that despite an anti-fossil government in Australia, imports from Australia could increase sharply.
India’s unrestricted policy on coal imports could also have a significant impact on global coal trade and pricing.
Most of the country’s coal demand is met by domestic production. The state-owned Coal India has been given a mandate to mine as much as possible.
The world’s second-biggest coal producer, India registered 27 percent growth in April compared to last year.
The country’s leaders are very clear: India’s energy security is primarily dependent on its coal sector.
Last week, Pramod Agrawal, chairman of Coal India, said the company’s “priority is to ensure that the nation’s power plants are well stocked with domestic coal and the country gets power at a just price. The aim should be to securitize energy at least cost.”
He encouraged employees to exceed a 700 million-ton production target.
Coal shortages were partially blamed on increased demand for domestic production caused by higher prices for imported coal and natural gas, along with an upswing in the post-pandemic economy.
“It is not a coal crisis but a power demand-supply mismatch,” said Coal Secretary A.K. Jain.
Last week, the government issued orders for the reopening of more than 100 closed coal mines to boost production.
In a bold and rare move, the Indian government has also exempted its existing coal mines from getting environmental clearance for increased production.
Some active coal mines may produce as much as 40 percent more coal this year, potentially adding 150 million tons to the current production target.
And like India, China has been facing electricity shortages with unprecedented blackouts in more than 15 provinces during 2021.
The reality of developing economies like India’s proves the falseness of the mainstream media’s narrative that coal and other hydrocarbons are fuels of the past.
Read more at RealClearEnergy
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