India's heavy industries hit with coal shortages

In the wake of the short supply of coal, industry bodies have sought Prime Minister Narendra Modi’s intervention in the matter, stating that industries are compelled to purchase power from exchanges at higher rates due to an increased demand.

A major segment of the manufacturing sector, MSMEs and captive power plant-based industries have also jointly submitted a statement to the prime minister through a group of 10 industry associations.

Scarce supply of fuel for a prolonged period has led to a crisis for many industries such as aluminium, cement, steel including their captive power plants, the industries stated.

” … under the current situation, industries, especially continuous process plants are compelled to purchase power from exchange, causing power demand to increase and inflate exchange rate of power significantly,” the statement said.

According to the statement, dispatches of coal to sectors like captive power plants, steel, cement, and sponge iron have been reduced by up to 32% this year.

The situation has worsened to such a level that industries may be forced to cut down on production or even close.

If an equitable supply of coal between power and non-power sectors had been achieved during the January-March period, the coal stock situation at the power-end across sectors would have been much improved ahead of the summer and load on power utilities could have been reduced by generation from CPP units, the statement testified.

Coal Secretary A K Jain has attributed the low coal stocks at power plants to several factors, such as heightened power demand due to the boom in the economy post COVID-19, early arrival of summer, rise in the price of gas and imported coal and sharp fall in electricity generation by coastal thermal power plants.