Key Highlights:
- Two of Asia’s major economies are racing against the clock to avert a growing energy crisis.
- From October 15th, all industrial and commercial energy consumers would be required to purchase power at “market-oriented” pricing.
- Meanwhile, state leaders in India are warning the federal government about the dangers of coal scarcity.
Asia’s Major economies to face crisis
Two of Asia’s major economies are racing against the clock to avert a growing energy crisis. As its major coal mining centers deal with severe rains and catastrophic mishaps, China is attempting to ease worries about increasing costs, which are complicating attempts to address electricity shortages.
Meanwhile, some Indian politicians are warning that major districts, including the capital, New Delhi, may suffer a “power crisis” as the cost of energy rises, despite the central government’s claim that the country has sufficient coal supply to fulfill demand.
As the global economy reopens, global energy consumption is surging. However, supply is not keeping up.
Heavy rain and accidents stir worry in China
Power shortages in China are the consequence of a number of reasons, including the country’s post-pandemic construction boom and a government drive to cut carbon emissions, which forced hundreds of coal mines to close or curtail production early this year.
Restrictions on coal from important suppliers in Australia, as well as weather difficulties, have compounded the problem — and the latter has been especially acute this week, with torrential rains pounding Shanxi and Shaanxi provinces, two main mining centers that account for roughly half of the country’s coal output.
A collapsing roof at a coal mine in Shaanxi’s Xianyang city has exacerbated the situation. According to the state-run Xinhua News Agency, the tragedy, which killed four miners and badly wounded four others, occurred just days after the province administration urged all mines to increase safety inspections. The local administration is currently looking into the reason for the fall.
From October 15th, all industrial and commercial energy consumers would be required to purchase power at “market-oriented” pricing. Beijing has previously stated that electricity costs would be permitted to climb by up to 20% from present base levels, or government-set benchmark rates. At the moment, the restriction is 10%.
India leaders warn of a potential power crisis
Meanwhile, state leaders in India are warning the federal government about the dangers of coal scarcity. Over the weekend, Delhi Chief Minister Arvind Kejriwal tweeted that the capital “may face a power catastrophe,” adding that he had recently written to Prime Minister Narendra Modi to warn him of the impending energy problem.
Kejriwal urged the government to shift coal and gas supplies to utilities serving the capital, claiming that it was “necessary to ensure uninterrupted electricity in Delhi, which is catering to critical and crucial installations of national importance.”
Coal stockpiles at the majority of India’s power facilities have plummeted to dangerously low levels. According to a study by India’s Central Electricity Authority (CEA), as many as 61 of the 135 coal-fired power reactors in the region have two days or less of coal supply. Coal stockpiles at 16 of them have been depleted to zero, according to the report. However, the Indian government has stated that it has sufficient supply to fulfill demand. Nonetheless, India’s condition “remains fragile.” While Coal India claims that its daily supplies have increased, experts observe that some provinces are “receiving less than half their contracted quantities” and that power shortage in the states of Punjab and Jharkhand are rising.
