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Coal Shortages Cripple Power Plants in India

Potters rest on the roadside, under the overhead power cables at Gurgaon, on the outskirts of New Delhi June 17, 2012.
Potters rest on the roadside, under the overhead power cables at Gurgaon, on the outskirts of New Delhi June 17, 2012.
NEW DELHI — India is reeling under severe power outages as coal shortages cripple many of its power plants. Energy shortages are being blamed for slowing economic growth in the country.

The business hub of Gurgaon on the outskirts of the Indian capital was the scene recently of an angry protest. As summer temperatures crossed 45 degrees celsius, hundreds of sweltering residents blocked traffic and threw stones to protest power outages extending up to eight hours a day.

Gurgaon is not the only town where anger is boiling over. As India swelters under one of the hottest summers in recent memory, residents and industries across much of the country have been reeling under severe power shortages.

India had hoped to bridge a chronic gap in power production by encouraging private investment in the sector in recent years. But a crippling shortage of coal to fire thermal power plants has set back many multibillion dollar projects.

Among them is Kineta Power in southern Andhra Pradesh state, which had hoped to produce nearly 2000 megawatts of electricity this year. The company’s director, Venkateswarlu Badveti, says efforts to get the project on stream have been delayed due to the company’s failure to secure coal supplies from the government, for which they applied nearly four years ago.

“Unfortunately we have been updated that the coal clearance will come soon, but it has not materialized yet,” said Badveti.

India is suffering from coal shortages despite ample supplies - it has the world’s fourth largest coal reserves.

The problem is blamed on a host of factors. The state controlled firm that produces most of the country’s coal has not scaled up production sufficiently to meet the growing demand. Plans to develop new mines have been put on hold by concerns of damaging the environment.

Private power plant producers have scrambled overseas to boost fuel supplies. But a senior official at the Association of Power Producers of India, Raghvendra Upadhyay, says rising costs have added to their problems.

“While Indian power producers did step out and they acquired coal mines, the prices have gone up because of domestic conditions in those countries," said Upadhyay. "That has meant that the cost of power has also gone up. The problem is consumers have not been really been shoulder much of that burden, which has led to this current problem.”

Many industries say they have to routinely cut back on production due to the energy outages. Others rely on much more expensive power generated with diesel to make up the shortfall. Experts say the power shortages are one of the factors holding back economic growth at a time when the economy is slowing down.