November 29, 2021

India to stockpile gas & coal to avoid future energy crunch

India is currently struggling with a devastating coal shortage triggered by a surge in power demand as the country reopens its economy following the coronavirus pandemic shutdown, and a drop in imports connected to high coal prices across the world.

The energy-hungry nation has experienced power cuts of up to 14 hours per day despite record supplies provided by the state-run Coal India, the world’s number one coal miner.

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“So let us start thinking and discussing about keeping a strategic reserve of gas and imported coal, so that economies are able to tide over these supply shocks for about a month or so,” Alok Kumar, India’s power secretary, said at the South Asia Power Summit, which is organized by the Confederation of Indian Industry.

Coal reportedly accounts for more than 70% of India’s electricity generation, and most of the country’s 135 coal-fired power plants have fuel stocks of less than three days.

“High prices will make energy security very challenging if we don’t have a well thought out strategy,” Kumar said.

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The severe energy crisis is forcing India, which is the world’s second-largest coal importer with the fourth-largest reserves globally, to compete with neighboring China, as both are currently under pressure to ramp up imports.

India’s average monthly imports of thermal coal reportedly totaled 21 million tons before the Covid-19 pandemic, with 6 million tons out of the total allocated for the power sector. Indonesia, Australia and South Africa are among the country’s major suppliers.

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