InvestorQ : Why is India facing a huge coal shortage currently?
NISHA Nayak made post

Why is India facing a huge coal shortage currently?

Priyanka N answered.
2 months ago

It is not just India, but the whole world is suffering a shortage of coal. The situation is really bad. Nearly 16 of the 135 plants have zero coal and over 70 plants only have coal for 3 days and 110 plants have just one-week inventory. Due to the sharp spike in global coal prices, Indian power consumers are shunning coal imports, putting pressure on CIL. The only reason local coal is cheap is because CIL is regulated to avoid power inflation.

In most of the cases, utilities are unable to pass on the power costs to the end-consumer. State run electricity boards are absorbing the price shock and are adding to their own losses. This has also resulted in delayed payments to power producers, worsening the problem further. Overall, the cash flows are getting impacted. Since PPAs are long term in nature, the costs cannot be passed on easily. Power strain is being passed on to coal.