Worldwide prices hit all-time highs as electricity demand rises, a coal catastrophe looms

According to official statistics, almost half of India's 135 coal-fired power plants have fuel reserves of fewer than three days, well short of federal standards that demand supplies of at least two weeks.

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Worldwide prices hit all-time highs as electricity demand rises, a coal catastrophe looms

Utilities are rushing to secure coal supply as stockpiles reach critical lows as a rise in industrial power demand and slow imports owing to record worldwide prices drive power plants to the edge.

According to official statistics, almost half of India’s 135 coal-fired power plants have fuel reserves of fewer than three days, well short of federal standards that demand supplies of at least two weeks. Globally, power-generation fuel prices are rising as industrial expansion boosts energy demand, putting a squeeze on coal and liquefied natural gas supply.

Also Read: EPCES expresses gratitude to UPPCL for waived one-month Electricity Fixed Charge.

India is up against consumers like China, the world’s top coal consumer, which is under pressure to increase imports in the face of a chronic power shortage. Inflationary pressures are being fed by rising oil, gas, coal, and electricity costs throughout the world, delaying the economic recovery from the COVID-19 epidemic.

“The supply crisis is anticipated to endure, putting pressure on the non-power sector as imports remain the sole alternative to satisfy demand, albeit at growing costs,” S&P’s CRISIL said in research this week, adding that Asian coal prices are expected to rise further.”By next March, coal inventories at [Indian] thermal plants will have improved only gradually.”

Indian power producers having long-term contracts with distribution utilities are unable to pass on increasing input prices unless the contract specifically allows for it. Traders and utility officials stated that owing to high pricing, power plants that rely on imported coal have slowed their purchases.

According to statistics gathered by KPLR, India’s average weekly coal imports plummeted by over 30% from the norm for the first seven months of the year from August to late September, when global coal prices surged over 40% to all-time highs.

The most recent week’s import total was under 1.5 million tonnes, the lowest in at least two years. This month, no fresh tenders for new cargoes appeared on the websites of major coal-importing state utilities.

Coal prices from major exporters have lately reached all-time highs, with Newcastle prices in Australia jumping by nearly 50% and Indonesian export prices rising by 30% in the previous three months. According to Reuters’ estimates, the September Indonesia coal price benchmark was up to seven times more than equivalent grade fuel sold by Coal India to Indian utilities.

Coal owned by the government Higher global coal prices and freight rates, India stated this week, have prompted utilities that rely on imported coal to reduce electricity production, resulting in a greater reliance on domestic coal-fired facilities. Despite possessing the fourth greatest coal reserves, India is the world’s second-largest coal importer. Utilities account for almost three-quarters of total consumption, with Coal India producing over 80% of the country’s output.

As the economy recovers from the current wave of the COVID-19 epidemic, power plants are now dealing with increased demand from industry. According to a Reuters examination of statistics from federal grid regulator POSOCO, power consumption in industrialized states such as Maharashtra, Gujarat, and Tamil Nadu increased by 13.9 percent to 21% in the three months ended September.

Nearly a third of India’s yearly electricity usage is used in these three states. Half of the country’s yearly power usage is consumed by industries and offices. After the initial wave of coronavirus, the residential and agricultural sectors were significant drivers of electricity consumption over the remaining two quarters of the fiscal year ending March 2021.

While there have been no large-scale power outages in India, shortfalls have nearly quadrupled from last year’s insignificant levels, according to POSOCO statistics.

The Hindu

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Worldwide prices hit all-time highs as electricity demand rises, a coal catastrophe looms
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According to official statistics, almost half of India's 135 coal-fired power plants have fuel reserves of fewer than three days, well short of federal standards that demand supplies of at least two weeks.
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THE POLICY TIMES
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