Reasons Why There is Coal Shortage In India?|List Of States Which May Face Power Cuts

4 Reasons why there is coal shortage in India:

1. High increase in demand and consumption of electricity

 A surge in the revival of the economy after the second wave of Covid led to an unprecedented increase in demand and consumption of electricity. The daily consumption of electricity has crossed beyond 4 Billion units per day and 65% to 70% of demand is being met by coal-fired power generation only, thereby increasing dependence on coal.

2. Heavy rains in coal mine areas during September, 2021

Power consumption for the period August-September has progressively increased from 106.6 BU per month in 2019 (normal non-covid year) to 124.2 BU per month in 2021. During this period the share of coal-based generation has also increased from 61.91% in 2019 to 66.35% in 2021. As a consequence, total coal consumption in the month of August-Sept, 2021 has increased by 18% in comparison to the corresponding period in 2019.

3. Increase in prices of imported coal to unprecedent high level

Imported coal price of Indonesian coal jumped from $60/ton in March-2021 to $160/ton (in Sept /Oct 2021) of 5000 GAR (Gross as received) coal. The import of coal has decreased in comparison to 2019-20 due to import substitution and rising prices of imported coal. The reduction of imported coal is compensated by the domestic coal for power generation, hence increasing the demand for domestic coal further. As compared to 2019, there has been a 43.6% reduction in power generation from imported coal which led to extra demand of 17.4 MT of domestic coal during Apr-Sept,2021.

4. There are also legacy issues of heavy dues of coal companies

From certain states viz., Maharashtra, Rajasthan, Tamil Nadu, UP, Rajasthan, and Madhya Pradesh.

List of states which may face power cuts

  1. Punjab
  2. Kerala
  3. Rajasthan
  4. Tamil Nadu
  5. Andhra Pradesh
  6. Delhi

Power Ministry mandates energy accounting of DISCOMs

On 11 Oct 2021 Power Ministry issued a press release mandating mandates energy accounting of DISCOMs. Ministry of Power today mandated electricity distribution companies to undertake energy accounting on a periodic basis. The regulation in this regard was issued by the Bureau of Energy Efficiency (BEE) with the approval of the Ministry of Power, under the provisions of the Energy Conservation (EC) Act, 2001. The notification stipulates quarterly energy accounting by DISCOMs, through a certified Energy Manager, within 60 days. There will also be an Annual energy audit by an independent Accredited Energy Auditor. Both these reports will be published in the public domain.

Objectives of energy accounting of DISCOMs

  • Development of a comprehensive energy accounting system to quantify and determine actual losses in the power distribution system, segregated across technical and commercial losses.
  • Identify areas of leakage, theft, wastage or inefficient use, thereby paving the way for tackling the present challenges of high Transmission and Distribution (T&D) losses.
  • Enable and ensure an independent 3rd party energy audit of the distribution system to arrive at a true and fair picture of T&D losses.
  • To enable the Distribution utilities to undertake targeted efficiency improvement activities to reduce T&D losses in priority areas / customer segments.
  • Providing a basis for prioritizing energy capital investments and help budget more accurately to achieve maximum results.
  • Identification of overloaded segments of the network for necessary capacity additions.


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