Teji Mandi Explains: Full-blown power crisis embraces India

Coal crisis has made Indian Railways cancel passenger trains to allow faster movement of coal carriages. Major states are facing acute power crisis today.

Teji MandiUpdated:Monday, May 02, 2022, 04:43 PM IST
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Teji Mandi Explains: Full-blown power crisis embraces India | File Photo

How Bad Can It Get?

Coming out from the pandemic, who would’ve thought there would be troubles lined up for us? This summer has been and will be a difficult one for India. 70% of the country's electricity comes from coal and currently it’s facing a peak crisis. Power Minister RK Singh says that there’s power shortage as payments have not been made to generation firms. This means there’s not just a coal crisis but also undue payments in the story.

Power generation firms are selling without getting the money on time. Country’s biggest coal supplier Coal India owes about Rs 12,300 crore. Despite not being paid a total of Rs 1.1 lakh crore, power generation firms are still selling electricity with occasional power cuts. The payment delay across the value chain is weighing heavily on the power sector. That’s why states are forced to undertake power cuts. Until the outstanding dues are cleared, power cuts will happen bringing down the industrial activity further triggering inflation

How Long Will This Continue?

There’s a clear demand-supply mismatch. The Centre had not anticipated a sudden surge in power demand. Also, several states are shying away from buying expensive coal. As per Markets Insider, global coal prices were around $326 per tonne on April 22 against $120 per tonne in January. The prices have almost tripled in just 3 months. Meanwhile, heatwaves have led to an increase of power demand which the government is not able to deliver. So there's a long list of problems, and it seems that the power crisis will continue until the monsoons arrive.

What Should We Do?

Save electricity as much as you can. Turn off the lights when you don’t need them and switch to a non-electric stove because somewhere someone is facing a power cut. The only way to solve this is to stay calm and save power.

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