India’s economic status, which has just passed the peak of COVID-19, is gradually recovering, but everyone does not know that another fatal problem has quietly erupted, that is, lack of electricity. Electricity is a necessary condition to promote economic recovery. If India is really short of electricity or even causes a large-scale blackout, then economic recovery will be just a pipe dream. 70% of India’s domestic electricity sources are coal-fired power plants, widely regarded internationally as representatives of high dependence on a single resource. However, recently, many domestic power plants in India have stated that they face insufficient coal reserves in thermal power plants and will face the dilemma of no coal to burn. According to the information released by the Indian government, in India’s 135 coal-fired thermal power plants, nearly half have coal storage for less than 3 days. According to government regulations, general thermal power plants need to keep coal storage for 14 days.
Although the price of international coal has skyrocketed in recent months, leading to higher costs for thermal power generation worldwide, India has had to reduce overall coal purchases. From August to September of this year, global coal prices soared by 40%, setting a new global high, and India’s weekly average coal imports also fell by 30% from January to July this year. But even so, India should not be short of coal! After all, another surprising fact is that India has the fourth-highest coal reserves in the world! It stands to reason that with such a wealth of mineral deposits, India should not have “no carbon to burn.” The question is, what happened?
In India, about 80% of coal mines are operated by the state-owned “Coal India.” Of course, in the face of a coal shortage, the company also plans to work overtime to meet domestic demand. However, the last few months have happened to be the monsoon season in India. The heavy rain has severely affected mining operations, and traffic in some areas has also been paralyzed. As a result of the reduction in output, it is also difficult for the coal mines mined to be transported to the major thermal power plants in time.
In addition, the Indian government has deliberately promoted the use of renewable energy plans in recent years. On August 17, 2021, Indian Prime Minister Narendra Modi announced that more than 100 trillion rupees (about 1.35 trillion US dollars) would be invested in a new Indian infrastructure design, which will vigorously promote the development of the renewable energy industry. It is expected that India will achieve zero carbon emissions by 2030, making India an energy-independent country. But because of this, the mining conditions in India’s coal mines have significantly deteriorated in recent years. As a result, many mining plants have already turned off their lights, which has exacerbated the current coal shortage in India.
There is no doubt that if the government cannot come up with an effective solution in the short term, India will undoubtedly have a power shortage crisis, and India’s booming manufacturing industry will bear the brunt. After the manufacturing industry, it is the consumers who will be severely affected. As electricity increases, these costs will naturally be passed on to the end consumers, which is the first step to causing inflation.
Now, the Indian government has used all resources and actively coordinated with state-owned enterprises to increase production to meet the severe current shortage of coal. From the perspective of long-term plans, India must implement an energy transition, but maintaining a stable power supply while transitioning is currently the biggest challenge facing India.