India's electricity demand rises by 4.9% in early October amid coal crisis

India's electricity demand picks up further in October while coal shortage lingers. The country is currently facing a supply deficit due to the ongoing coal crisis.

Amid an acute coal shortage, India's electricity demand surged 4.9% during the first half of October as supply fell short of demand by 1.4%. With economic activity bouncing back at an unprecedented rate after the horrifying second wave of coronavirus pandemic, the country's electricity demand has touched soaring heights, resulting in a supply deficit due to a coal crisis.

The Talwandi Sabo power plant in Mansa, Punjab.

This is despite a 3.2% rise in coal-fired generation and 30% rise in solar output, a Reuters report analysing the government's data showed. The coal shortage has forced several northern states, including Rajasthan and Punjab, to cut power this month for up to 14 hours a day.

In addition to the power demand, high global coal prices have left utilities scampering for coal - India's dominant source of generating electricity - despite record supplies from the country's largest miner Coal India, which has a near-monopoly in coal production.

 Three-fifths of India's coal-fired capacities reportedly have coal inventories that would last only three days or less, federal power ministry data showed.

Coal India Ltd recently announced that it has temporarily stopped coal supplies to its customers from the non-power sector. However, the company assured that it is only a temporary move till the situation stabilises.

Coal's share in India's electricity generation jumped to nearly 70% in the first fifteen days of October, nearly 4% higher that the average of 66.5%, during the whole of September, the Reuters analysis quoting federal grid regulator POSOCO showed.

The average coal inventory held by power plants would last four days, two-thirds lower than an average of 12 days two months ago. The number of power plants with over a week of stock has declined, the power ministry data shows.

Union power minister Raj Kumar Singh had in early September asked officials to consider diverting coal to power plants with extremely depleted stocks, and reduce inventory targets to 10 days from 14 days, Reuters reported.

At least 18 utilities have no coal left as on Oct 12 as opposed to 1 on August 12.