InvestorQ : How bad is the power scene in India and what does it mean for Coal India, Tata Power and NTPC? What has triggered this power problem?
Deepa Salunkhe made post

How bad is the power scene in India and what does it mean for Coal India, Tata Power and NTPC? What has triggered this power problem?

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Arya Nanda answered.
2 months ago
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The coal shortage and the power crisis have been around for quite some time but now promises to become a lot more acute with the sharp depletion of coal stocks in the states of Delhi, Punjab and Andhra Pradesh. These states have complained that they had less than 2-3 days of coal supply in their inventories and may trigger power shutdowns after that. It is instructive to understand why this is happening.

Firstly, there has been an unprecedented increase in demand for electricity, so there has been a demand push too. Secondly, the heavy rains in coal mine areas in September 2021 also contributed to the shortfall. A very important factor was the spike in prices of imported coal which enhanced demand for local coal. Finally, the failure to create adequate coal stocks before the onset of Monsoon was also a case of faulty planning.

There are other reasons too like heavy dues of coal companies from states like Maharashtra, Rajasthan, Tamil Nadu, UP, Rajasthan and Madhya Pradesh. Daily consumption of electricity has crossed 4 Billion units per day and more than two-thirds is being met by thermal power. For now the crisis may be addressed by ensuring adequate supply to the grids where there is highest requirement. Hopefully, that should avoid the embarrassment for power units.

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