Effects of coal crisis in India

Coal crisis in India
Coal crisis in India

An estimate of 70 % of India’s power is generated by coal. A shortage of coal would very much bring shockwaves throughout the country. The crisis is just around the corner after it was announced that only a ‘few days’ worths of fuel are left in the thermal power plants. This shortage is an instance of demand-supply inconsistency. Half of the country’s 135 coal-fired power plants have an acute shortage of supply.

Causes of the coal crisis

This extreme problem was not born overnight. According to the ministry of power, there are several reasons that led India to stand on the brink of this hardship. One of the reasons being; that in September 2021 many regions in the country observed heavy rainfall including the coal mines. This negatively impacted the transportation as well as production of coal. There was depreciation in the imported coal-based power generation and an increase in the usage of domestic coal; this was because there was a steep rise in the cost of imported coal.

The inability to build ample coal stocks before the arrival of the monsoon. The revival of the economy following the second wave of COVID-19 led to an unprecedented increase in the demand and usage of electricity. In states like Maharashtra, Rajasthan, Uttar Pradesh, Madhya Pradesh and Tamil Nadu etc. there are legacy issues of major dues of coal companies.


It is pretty evident that this catastrophe is stark in nature. The impact of the coal shortage if not handled rightly may affect everyone. India’s economy might face a challenging delay in reopening in case industries have electricity scarcity. Businesses and markets might need to decrease the extent of their production. India is an important player in the global coal market. It is the second-largest coal importer. It also has the world’s fourth-largest coal reserves. This crisis may send a shock throughout the market. This power shortage threatens power cuts all across the nation.

The manufacturing section which is picking its pace up after the pandemic could again be shaken to its core. Coal crisis may lead to the shutting down of power plants. Some states like Punjab and Haryana have imposed scheduled power cuts in major cities due to the reduced capacity of plants for generating power. The situation in the state of Bihar comes out to be much more severe with almost 7-8 hours of power cuts. Energy consumption peaks as the festive season swings by in India. The scarcity of coal may also have inflationary after effects.

Solution to the coal crisis

It is not possible to stop using coal in an instant altogether. That transition has to be smooth. Slowly reducing the dependence on coal and moving onto other cleaner sources for energy.

One of the simplest solutions that come forward is the rationing of power supply. This means providing domestic power mindfully in these times when it is scarce. Other than coal hydroelectric power is India’s major power generator. With the heavy monsoon, we can make the most out of it by producing hydropower from the dams. A strong push towards domestic coal production seems like a viable option. Other alternatives that stand out are using power generated through wind and the sun. These are cost-effective substitutes to coal. However, they have their own drawbacks of only being operational in the presence of the sun or wind. Yet another option is nuclear power plants that produce energy through the process of nuclear fission. These nuclear power plants function on a very large scale. With the onset of winter, the energy supply would drop. This would also help to fix the demand-supply mismatch.

This unprecedented crisis makes us realize the extreme importance of electricity. It gives us a picture of how the country would be at a standstill if there was no coal. The economy would slow down, businesses shut etc. and even at the micro-level each and every one of us would be impacted by this shortage. India should work towards giving up non-renewable resources. Non-renewable energy sources are harmful to the environment. Instead, we should aim to adopt clean energy sources. Some of the clean energy sources are biomass, solar and wind power, hydropower etc.

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