10% power outage likely due to coal shortage: Crisil

| | Mumbai
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10% power outage likely due to coal shortage: Crisil

Thursday, 28 October 2021 | PTI | Mumbai

10% power outage  likely due to coal shortage: Crisil

Crisil Rating on Wednesday warned that despite the respite from a temporary fall in power demand, a tenth of the thermal capacity is still vulnerable to the outage as it sees coal-stock remaining in single-digit days through the rest of the year.

Recently, the agency had said that the ongoing coal shortage could debilitate corporate India if it lingers on for long.

About 10 per cent of the 209 gw, to be precise 20 gw capacity of coal-based private power stations remain vulnerable to outage amid surging coal demand. Despite the recent dip in demand (10 per cent over October 16 and 17) due to heavy rains, coal shortage persists as their inventory is only for 5 days, the report said.

Over half of these capacities do not have fuel supply agreements, which increases their reliance on coal, either through imports or through e-auction where prices remain elevated, both these may force these plants to shutter operations for a few days as their operating cost may outweigh revenue.

Coal shortage is acute despite domestic supply rising 16 per cent in Q2FY22 over the same period in the pre-pandemic FY20, partly due to substitute non-coking coal imports falling over 20 per cent and depleted coal stock at the plants.

Another problem is the erratic domestic supplies due to seasonal rains impacting mining. Overall coal supply grew around 8 per cent. 

Meanwhile, domestic e-auction premia have jumped over 130 per cent over the Coal India notified rate in September, from 80 per cent in September 2019 due to the supply shortage.

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