INSUBCONTINENT EXCLUSIVE:
India is the world's second largest importer of coalPower utilities are scrambling to secure coal supplies as inventories hit critical
lows after a surge in power demand from industries and sluggish imports due to record global prices push power plants to the brink.Over half
recommending supplies of at least two weeks.Photo Credit: ReutersPrices of power-generation fuels are surging globally as electricity demand
rebounds with industrial growth, tightening supplies of coal and liquefied natural gas.India is competing against buyers such as China, the
world's largest coal consumer, which is under pressure to ramp up imports amid a severe power crunch.Rising oil, gas, coal and power
prices are feeding inflationary pressures worldwide and slowing the economic recovery from the COVID-19 pandemic."The supply crunch is
expected to persist, with the non-power sector facing the heat as imports remain the only option to meet demand but at rising costs,"
ratings agency S-P's unit CRISIL said in a report this week, adding it expected Asian coal prices to continue to increase."Coal inventory
at (Indian) thermal plants will improve only gradually by next March."Power producers locked in long-term agreements with distribution
utilities cannot pass on higher input costs unless a clause to pass on such expenses are written into the contract.Traders and officials at
utilities said buying by power plants dependent on imported coal had been muted due to high prices
Websites of major coal importing state utilities did not show any new tenders seeking new cargoes this month.Coal prices from major
fuel sold by Coal India to Indian utilities, according to Reuters calculations."Traders who bought coal from Coal India in the spot auctions
operator.State-run Coal India said this week higher global prices of coal and freight rates have pushed utilities dependent on imported coal
to curtail power production, resulting in higher dependence on domestic coal-fired plants.India is the world's second largest importer of
coal despite having the fourth largest reserves
industries as economic activity rebounds from the latest wave of COVID-19 pandemic.Power consumption in industrialised states including
data from federal grid regulator POSOCO showed.The three states account for nearly a third of India's annual electricity consumption
Industries and offices account for half the country's annual electricity consumption.During the last two quarters of the fiscal year
Credit: Reuters"This year we have seen a tremendous growth in industrial demand," said Shahmeena Husain, Managing Director of Gujarat's
electricity regulator told Reuters.While there have not been any large scale power outages in India, deficits have increased nearly
four-fold from the negligible levels recorded last year, POSOCO data showed.The shortages have so far been mostly restricted to northern
because of work from home and air conditioning," a senior Tamil Nadu government official told Reuters."Following opening up of industries
after the second wave, industries are king," the official said.
