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Author: Admin | 2025-04-27
Coal has been in the news over the past few months. Not without reason. The recent power crisis in India has moved coal to the centre stage. India’s energy sector depends heavily on coal as fuel for its thermal power plants. The ability of coal-based power plants to operate round-the-clock and provide base load capacity is central to meeting the growing electricity demand to fuel India’s economic growth.India is the world’s third largest electricity producer with an installed capacity of 399 giga watts (GW)1 and annual generation of 1,490 billion units.2 Coal currently accounts for approximately 70% of the total generation and dominates India’s energy generation mix.3 Therefore, any aberration in the demand and supply patterns that result in a coal shortage would have a domino effect on India’s energy markets and economy. India - Power generation capacity (MW) | 31-Mar-22Source: Ministry of Power While several reports and articles have been written on the energy crisis and the primacy of coal in the current context, now is the time to take a step back to understand:the genesis of the crisisthe role of coal in future energy mix possibilitiesinitiatives taken to contain its harmful environmental impact.This is especially crucial as India takes decisive steps down the green path to achieve its 2030 Conference of Parties (COP) 26 goals. India’s COP 26 goals for 2030 include an increase in non-fossil fuel-based energy capacity to 500 GW and reduction of total projected carbon emissions by 1 billion tonnes. What caused the power crisisThe recent power crisis in India may be attributed to the following factors: As economic activity recovered post the COVID-induced shock, electricity demand surged in industries. The onset of record temperatures in the summers, reopening of commercial complexes and offices, and increased consumption contributed to the recent sudden peak in power demand." data-image="/content/dam/pwc/gx/en/brand-simplified/picto-images-132/red-for-pwc-only/picto-growth-economy-red.svg" onclick="highlights_modal.show_modal(this)"> As economic activity recovered post the COVID-induced shock, electricity demand surged in industries. The onset of record temperatures in the summers, reopening of commercial complexes and offices, and increased consumption contributed to the recent sudden peak in power demand." data-image="/content/dam/pwc/gx/en/brand-simplified/picto-images-132/red-for-pwc-only/picto-growth-economy-red.svg"> Sudden growth in electricity demand Sudden growth in electricity demand While domestic coal production for FY22 registered 8.55% year-on-year growth at 777 million tonnes (MT),4 there is still a coal shortage at power plants. As on 1 June 2022, out of 165 coal-based power plants, 100 are running at critical coal stock.5 Thermal power plant generation increased by 7.60% in April 20226 compared to April 2021, while the planned increment was only 2.15%. This coal shortage has been exacerbated by inadequate planning and demand forecasting." data-image="/content/dam/pwc/gx/en/brand-simplified/picto-images-132/red-for-pwc-only/picto-forecasting-red.svg" onclick="highlights_modal.show_modal(this)"> While domestic coal production for FY22 registered 8.55% year-on-year growth at 777 million tonnes (MT),4 there is still a coal shortage at power plants. As on 1 June 2022, out of 165 coal-based power plants, 100 are running at critical coal stock.5 Thermal power plant generation increased by 7.60% in April 20226 compared to April 2021, while the planned increment was only 2.15%. This coal shortage has been exacerbated by
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