Coal news and updates

Indian states stare at power shortage amid coal supply crisis at power plants

Several states in India are likely to see a power shortage in the coming weeks as power plants struggle to find optimum amounts of thermal coal amid rising summer demand, higher import costs and the resultant supply tightness, sources told S&P Global Commodity Insights in the week that began April 10.

Global thermal coal prices have remained elevated as a fallout of the Russia-Ukraine conflict, which disrupted trade flows and crippled supply amid additional demand from Europe, which has now sanctioned Russian coal. As a result, imported coal has largely remained out of bounds for price-sensitive markets like India.

Market sources said India may need to import coal even at the current higher prices. “While the prices are too high, imports can still be done to meet the summer demand on a temporary basis to stabilize the situation and avoid outages,” an India-based source said.

According to the latest data by India’s national load despatch centre, the country’s power plants recorded an electricity supply shortage of 63.19 million units on April 10, much higher than the average daily supply shortage of 16.01 million units in the entire fiscal year 2021-22 (April-March).

The shortage level was even higher at 80.08 million units on April 7, which raised concerns among several market participants, who said the crunch was near to mid-October 2021 levels when India faced an acute power crisis as the stockpile at 115 power plants slipped to critical levels.

Coal stocks at the country’s utilities had dipped to 7.2 million mt on Oct. 8, 2021, sufficient only for four days’ worth of coal burn, due to disruptions in supply caused by heavy rains and lesser power generated by imported coal-based utilities. As on April 10, as many as 95 power plants were running on critical coal stocks, including 11 imported coal-based electricity generating stations.