Coal crisis: Denial won’t work

Govt, CIL must admit failure, deal with situation

The government's denial of any shortage of coal has not put an end to concerns over its short supply and lack of availability in many parts of the country. There is a serious energy crisis as many thermal power plants are facing coal shortage. As many as 104 of the 135 thermal plants have been hit, and a number of them have reported that their buffer stocks may last for only two or three days. The recommended norm is over 20 days’ stock. Some of them have stopped working. Some states have already imposed power cuts and load-shedding and there are warnings that more severe measures may be needed. The Delhi government has issued a power shutdown warning. Power production has fallen below the normal levels and that is affecting domestic and industrial consumption. The textile industry in Surat has reportedly decided to close down for a month.

Also read: No power cuts, but Karnataka needs more coal: CM Bommai

Coal shortage during the last months of the year is not uncommon, but this year it has been aggravated by mismanagement and lack of planning on the part of Coal India (CIL). About 55 per cent of the country’s energy production depends on coal and CIL accounts for 83 per cent of it. It had cut its production of coal during the pandemic months but did not foresee the rise in demand after the economy started recovering. Its production had actually been slowing down and it did not seem to have planned for the sudden rise in demand. The monsoon also affected production and there were problems in transportation of coal from pitheads to thermal plants. Better foresight and planning would have averted the situation. The shortage led to an increase in imports but the spike in international prices made matters difficult. Power production using imported coal fell and the price of power increased. Some power producers have been unable to honour their contracts to supply power to states.

Since power is a critical input, disruption of its supply will adversely affect the nascent recovery of the economy. If scarcity of power leads to increase in the price of electricity, it will lead to inflation. But governments may not allow prices to be hiked and that will put pressure on the finances of power distributors. Union power minister R K Singh has said that some states are creating unnecessary panic. He has issued warnings to discoms against load-shedding and pulled up GAIL and Tata Power CEOs for “irresponsible behaviour’’. Another minister, Piyush Goyal, has blamed the UPA government for the present crisis. The government cannot solve the impending crisis either by denying its existence or shifting the blame. It has to address the situation as it exists today.

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