Power crisis may trip factory output further

The high-profile Ramakrishna Puram area of South Delhi that houses the office of the Central Electricity Authority (CEA), the apex planning body for the country's power sector, has been seeing an average of 3-4 hours of load shedding on a daily basis over the past few days.

“We too have not been spared. With the economy clocking at 8 per cent growth and coal production growing just 2 per cent annually, this was bound to happen sooner or later,” was the refrain from a senior official at CEA on the debilitating power crunch. While planning, he admitted, was partly at fault the real problem was in the implementation of the coal production strategy. Just a handful of unforeseen events — the Telangana stir that affect output from Singareni Collieries, flooding in eastern region coal fields and freak accidents at NTPC stations — managed to trigger a nationwide coal shortage that walloped consumers across the whole country in a jiffy.

Critical stocks

From the beginning of October, the number of key thermal power stations in the country facing dwindling coal stocks had been rising till about the middle of the month. Generally thermal stations are normally expected to hold coal stocks of between 15 and 30 days, depending on the location of the project.

The result was an alarming rise in power disruptions across the country, with key thermal stations left high and dry without adequate fuel to continue normal operations. While the Singareni strike has directly impacted southern States, there is no doubt that they have coped better in terms of maintaining grid discipline. Northern States, especially Uttar Pradesh and Haryana, have on the other hand resorted to massive overdrawing from the integrated NEW (north-east-west) grid, resulting in frequency plummeting way below the permissible lower limit of 49.5 hertz during most days in the end of September and early October.

In all, nearly 8,000 MW of thermal capacity is estimated to have been out due to the coal strike and the shortages at NTPC stations, while there has been a drop of another 100 million units in hydro generation due to the receding monsoon which aggravated the problems further .

Supplies

Under fire for faltering on supplies, coal companies have now been asked by the Coal Ministry to work overtime to ensure movement of fuel to key power stations. The Ministry has claimed that NTPC Ltd's key power stations — 705 MW Badarpur plant, 2,000 MW Rihand, 1,820 MW Dadri, 2,000 MW Singrauli and 1,050 MW Unchahaar stations — have been despatched more rakes of coal than they require for daily operations over the last three days, which could go into replenishing the critically low stocks at the stations.

Coal companies are managing to augment supplies mainly through the liquidation of stocks lying at pitheads at some of the eastern region coal fields. Generation at NTPC's 2,600 MW Ramagundam station, which has been a major casualty on account of the strike, has been rapidly improving now. NTPC is juggling around fuel from various sources to restore full-scale operations.

With Coal India Ltd planning to divert 4 million tonnes of coal from its e-auction quota to power utilities as a stop-gap measure to plug the shortfall, the situation could improve further in the coming days. The concerted efforts being made to bolster coal supplies to key thermal stations has already started showing results, with the latest CEA data for October 16 showing a reversal of the trend so far and a decline in the number of stations facing critical coal stocks. Shortages, though, are bound to stay as coal production has simply not been able to keep up with the demand from consumers.

Industry takes the hit

While consumers across the board were affected due to the crisis, the biggest hit has been on industrial consumers. Most States resorted to load-shedding of 8-14 hours for industrial consumers to tide over the supply shortages. Punjab asked the foundries to down shutters for at least three days a week while units from the sports goods hub of Jallandhar and cycle parts cluster of Ludhiana are facing increasing hours of outages. In Maharashtra, load-shedding was reported in the industrial belt of Thane and Nashik, while both in Uttar Pradesh and West Bengal the industry faced an increase in outages as the utilities ran out of funds to buy power in the spot market. The industrial units is southern states were also hit in a big way.

Coming against the backdrop of slowing growth, the power crisis is very bad news and could derail factory output further. Analysts predict that the data for October could take a hit on account of the loss of production of units across the country. The April-August index of industrial production (IIP) data had come in at 5.6 per cent against 8.7 per cent a year ago.

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