NEW DELHI: Bizarre it may sound, the Indian Railways are asking travellers to get off passenger trains because the tracks need to be kept free for freight trains to ferry coal to power houses. As many as 670 passenger trains have been cancelled in the last one week due to a huge spike in coal requirement. This is due to steep increases in electricity demand at a time of unprecedented heat waves across much of the country. This when India is among the biggest repositories of what is now a precious metal—the lowly coal. Why this has happened is a story that spans decades, although accountability for the persisting under-utilisation of domestic coal stocks remains distant
Alarmed Railway officials have increased the average daily loading of coal rakes to more than 400, which is the highest ever in the past five years. The rakes are carrying around 3,500 tonnes daily, to meet the immediate demand. The drill will continue for at least two more months to improve stocks at power plants. “The idea is to avoid any big crisis in July-August when coal mining is the least due to the monsoon,” a senior Coal Ministry officer told this reporter. Coal Minister Pralhad Joshi, helped by a top team, is personally monitoring the situation.
Experts are calling it the new reverse game, because in the past, freight trains always made way for passenger trains.
There are fears that hospitals in some of the top metros would have to organise their backup power if sufficient coal does not reach power plants located across the country. It is a serious situation. Appeals have gone out from various state governments to the masses to cut back electricity consumption. Easier said than done, especially for industrial units. Many are suffering, including in hubs such as Manesar. In a welcome move, Chief Minister M.L. Khattar has assured that Haryana will soon solve the problem of frequent blackouts. The sooner the better, users of power in a state that has become an industrial powerhouse are saying. In Punjab, a state where free power even to the most prosperous agriculturists has long been the norm, the state government is gearing up to face the crisis caused by supply bottlenecks.
Passengers are protesting against the cancellation of trains, especially around the time when the summer holidays are about to start. But the Railway authorities have been left with no other option. With power plants located across the country, the Railways have no option but to run long distance trains.
The data is heavily loaded against the official transporter. In 2016-17, 269 coal rakes were loaded by Railways, ramped up in 2017-18 and 2018-19. But during 2019-20 and 2020-21, loading fell to 267 rakes per day. And then in 2021-22, the rakes were increased to 347 per day. And now, it is hover- ing over 400 rakes per day. For reasons of cost and convenience, rail remains the preferred mode of transport for coal, which gener- ates about 70% of India’s electricity.

There is more and more tension in all power stations across the country. Data from Central Electricity Authority said India’s coal stock was at 21.445 million mt as of 26 April, just sufficient for a little over seven days of coal burn. In a report, S&P Global Commodity Insights said Indian thermal coal buyers were paying very high prices to import the fuel in what was considered a shift from the traditional pattern of low-cost buying. Many are hoping that the present crisis will finally lead to a reckoning as to how a country with massive coal deposits be- came among the biggest importers of the critical raw material. Over decades, heads have never rolled, even as imports surge and domes- tic production crises multiply. Prime Minister Narendra Modi is expected to launch a probe into this, and identify those responsible and when, so that the future may be better than the past has been since coal was nationalised by Prime Minister Indira Gandhi in the 1970s in her zeal for government takeover of as much of the economy as possible.

“Domestic stocks border on critical levels amid a surge in summer power demand. Several trades to India for 4,200 kcal/kg GAR coal of Indonesian origin were concluded in the week ending April 29 at $95-$98/mt FOB for Pana- max and Capesize vessels,” the S&P Global Commodity Insights said in a report. Miserable times for power plants and consumers, but happy days for coal importers. Data from the Coal Ministry showed the average price for Indonesian thermal coal paid by Indian buyers in 2021 [April-March] was $49.02. It has now more than doubled.

Worse, there is a global supply shortage as European countries decided to cut themselves off from Russian supplies due to its invasion of Ukraine. “European buyers have been pursuing Asian cargoes to fill the void created by the absence of Russian tonnages. Indian import demand is strong and they are filling the void left by China but it is only a temporary thing because of how high Indian demand is,” the S&P report said. Europe wants the gas and coal that Asia needs, now that NATO has embarked on a mission to reduce the Russian economy to rubble.

Rajiv Agarwal, secretary general of the Indian Captive Power Producers’ Association said imported coal is coming for NTPC, state-run power plants and general industrial purposes. States like Punjab, Uttar Pradesh and Andhra Pradesh are facing black- outs for over eight hours.

“This is a looming power crisis,” says Shailendra Dubey, chairman of All India Power Engineers Federation, an advocacy group. Captive power plants and industry have been getting little or no coal from the Kolkata-based Coal India Limited. CIL officials did not respond for an immediate comment. So let’s look at the figures. The maximum all India power demand on 26 April 2022, was met is 201.066 GW. But it surpassed last year’s maximum demand of

200.539 GW which occurred on 7 July 2021. In March this year, the growth in energy demand was around 8.9%. And the power demand is expected to reach about 215-220 GW in May-June, 2022.

This is not a good sign. Many industrial units on the verge of closure are buying coal at unviable prices, because a halt in pro- duction could trigger industrial unrest. And there are chances of imported goods flooding the markets, perhaps damaging domestic producers for a long time to come. This year, the trade deficit with China has crossed $80 billion, a record, despite efforts by Prime Minister Modi to go in for self- sufficiency in as many items as possible. Such efforts are ramping up under the direct supervision of the Prime Minister, whose career in politics has been built on his reputation as a top-class administrator, especially in his home state of Gujarat.

A looming issue is that of elevated electricity tariffs at the spot power markets. The raised tariffs have a bearing on Indian buyers, who have no choice but to procure costly imported coal. The average price in the spot power markets was Rs 11.85/unit over April 20-28, 2022. Last year, it was Rs 4.39/unit. The electricity supply shortage recorded on April 27, 2022 was 198.51 million units, compared with the shortage of 7.91 million units recorded the same day in 2021. The figures speak volumes.

The bottom line: coal supplies must reach power stations fast. This is what the Rail Ministry is working around the clock to achieve. Meanwhile, the ills pre- vailing in the matter of domestic coal production and reliance on costly imports are also being given attention. In the meantime, the heat wave continues and power blackouts in what is planned to be the world’s next superpower have once again become the norm in several parts of the country. The expectation is that such a situation will soon be reversed. Consumers are waiting for that to happen.