POWER THERMAL India continuing to grapple with 'severe and protracted power crisis' after surge in coal prices India is continuing to grapple with a "severe and protracted" power crisis after a sustained surge in global coal prices in late-2021 was further aggravated by Russia's invasion of Ukraine in February. The global price pressure eroded India's import volumes and reduced its power plant stockpiles to critically low levels just as an unrelenting heat wave pushed demand to unprecedented levels. The crisis is so severe that government in India is planning to cut domestic coal supply to power plants that are reluctant to import coal at current elevated
10 | CCAI Monthly Newsletter June 2022
prices. The current deficit, the second such coal shortage since October 2021, was initially triggered by the sharp rise in global coal prices in mid-2021. The disruption in global coal supply has led to a near 30% surge in the grade's price to $86/mt as on June ’22. To meet India's rising power demand as Covid-19 restrictions eased, the government first tried to boost domestic coal production. The government has also tried divesting coal blocks to private companies in recent years to incentivize them to increase India's overall coal production. With the global coal supply expected to remain tight in H2 and winter still some months away, coal shortages and power outages may well remain a pressure point for India for the rest of the year.
