Indian government denies country is facing urgent coal shortage

However, as of Tuesday, 61 of India’s 135 coal-fired plants have supplies that will last two days, or less

A senior Indian minister has denied that the south Asian country has a coal crisis, terming discussions around it “absolutely baseless” and said that the country in fact has surplus supply.

Nirmala Sitharaman, India’s finance minister, was asked about the coal shortage in India at a seminar in Harvard Kennedy School in Massachusetts on Tuesday. She dismissed any potential shortage of thermal coal and added that India was looking at long-term solutions to shift to renewable energy.

India is the world’s second-largest coal producer. Coal accounts for almost 70 per cent of India’s electricity generation. Three-quarters of the coal supply is mined domestically. In recent weeks, energy shortages have raised concerns in countries around the world, including China, the UK and mainland Europe.

Asked about a potential energy crisis in India, Ms Sitharaman said: “Absolutely baseless! There is no shortage of anything,” she said, according to Indian news agency PTI.

“There are not going to be any deficiencies which may lead to any shortfall of supply. So that takes care of India’s power situation. We are now a power surplus country.”

Her statement came after claims earlier this month by Indian officials over inadequate stock levels in several thermal power plants. One minister termed the situation “beyond usual”.

India’s Central Electricity Authority (CEA) said on Tuesday, that out of the country’s 135 thermal power plants, 61 have supplies that will last two days or less. As many as 18 plants do not have enough stocks for even one day, while 26 plants have supplies for a day, and 17 plants for two days. Overall, 116 have coal supplies for less than a week.

This graphic provided by Statista shows India’s heavy dependence on coal (Statista)

The cause behind the reduced stockpile was largely attributed to supply delays due to heavy rains and floods in some parts of India and record-high prices of global coal, which has caused a similar crisis in China as well. Moreover, India’s energy consumption has been steadily rising since the country began opening up following the brutal Covid-19 wave this year.

Reports from cities in northern India and government data analysed by Reuters news agency also showed that India’s power supply deficit in the first seven days of October amounted to 11.2 per cent of the country’s total shortages throughout the year.

The minister of coal and the country’s largest coal producer Coal India Limited later promised that they were increasing dispatch to the power stations and trying to gradually build up coal stocks for the future.

Alarms were also raised in the capital Delhi by chief minister Arvind Kejriwal. He said last week that he had written to prime minister Narendra Modi about the critical situation at power plants due to the coal shortage.