Everything about Coal Crisis and Its Impacts
For the last few days, a new modern-day crisis has been witnessed across the global news channels. It is the coal crisis or power crisis. Coal is one of the major sources of electricity generation across the world as it is one of the most easily available fossil fuels. And, thus it is considered as the backbone of the global electricity supply. Besides, electricity, coal also plays a major contribution to the manufacturing of steel, paper, and concrete. All these materials are essential in different areas and thus the coal crisis raises significant concerns. The underlying guide discusses the aspects related to the coal crisis.
Where did the crisis start?
The world started to notice the effects of the coal crisis last month. A few countries including the UK experienced a cold season in the summer. It resulted in a spike in demand for the gases. The UK switched on its old power plants and noticed a great spike in coal demands. The basic rules of economics started acting here. As the demand increased, the prices also increased. The prices of coal witnessed a price hike like never before. The price was greater than seen in the past thirteen years.
The largest producers suffered a greater impact
The impact of the crisis left its traces on countries like India and China as well. India and China are the leading producers of Coal across the globe. Besides, both countries are the leading consumers and importers as well. The recent crisis leads to undertaking strict actions.
China decided to ban the import of coal from Australia. It was a reply to the Australian Government that demanded inquiry and answers on the emergence of Covid-19 from China. Additionally, the inquiry was also about the shift of China from thermal energy to renewable energy to match the climatic goals.
When it comes to India, the situation is not so different. In the year, 2019-2020 the amount of coal used by the country was 73% of their own, and the remaining approximately 27% was imported. The reasons that led to the emergence of this crisis can be stated in the pointers below.
● The lockdown witnessed last year due to the global Covid-19 pandemic resulted in a decline in power demand. As the lockdown was withdrawn in 2021, the economy is reviving itself and has noticed a spike in the demand than the import. The low supply and import and the results of higher coal prices in the global market.
● Low coal production created a new issue. India witnessed an extended monsoon season, which resulted in floods and waterlogging in the coal mines. It was seen in many coal mines that acted as an important source of coal.
● Another major reason for crises is the maintenance of stock. The Central Government stated that some of the state governments had not maintained ample stock before the monsoon which led to the loss.
Impacts of the Coal Shortage
The impacts of the coal shortage can run deep down and can hamper development and growth in the long run. The immediate impacts of the coal crisis can be listed as under.
● Coal shortage will affect the electricity supply across the country and result in a shortage of electricity. The shortage will hit hard in the development areas and have a deep impact.
● Shortage of electricity due to the coal crisis will affect industrial development and hamper the economic reopening of the country.
● The large businesses could be affected and witness a downscale in the production which further affects the economic condition of the business and when noticed on the large scale the effect can be seen on the entire country's economy.
● India has a massive population, and the underdeveloped energy infrastructure of the country implies the effects of the crisis can last long.
Future steps
Different preventive measures are undertaken to prevent the deep impact of the crisis. The coal companies are consistently working to raise the output of the mines using various methods.
The Government is doing its part by bringing more mines into operation and increasing coal production. Increased production is expected to be a great relief and support the current situation of the country.
The citizens of the country should shift their thermal power usage to renewable energy sources. It can help fight back against the scarcity of non-renewable resources.
Switching to renewable energy sources will not only be beneficial in time of crisis but also help in the future. It will develop more chances of growth and development in each sector.
According to the sources, the crisis is most likely to end by the ending of October 2021. Still, all these are the estimates and the best way to deal with the crisis is to come up with easy-to-use and convenient energy sources that could last longer.
Upcoming challenges expected to be faced due to the coal crisis
The current scenario will surely leave a deep impact on the future of the country's development and growth. But, what are these challenges? The underlying pointers state the challenges that can be a hurdle in the forthcoming.
● India started industrialization based on the coal mines and abundance of this fossil fuel. Today India consumes its entire coal reserves and depends on them. Thus, the coal crisis can be a huge aspect to think about alternatives.
● Witnessing the graphs of the last four decades and earlier, the use of coal has witnessed a remarkable spike of around 700%.
● The current per capita consumption of commercial primary energy in India is far less than in other developed countries. And this can affect the progress of the country drastically. It's significant to increase the per capita consumption to lead the country ahead.
● Considering the spike in the Indian population and the lifestyle changes the power consumption is expected to rise in the future and the coal crisis might create a big challenge in this.
● With the limitation of other energy resources like petroleum, natural gas, eco-conservation restriction on hydel projects, and many more, coal remains of great importance in energy production. And the coal crisis can be a game-changer in the negative direction.
Companies benefited from the circumstances of the crisis
The rising demand for coal has directly affected the electricity demand. It has brought up a huge surge in the power sectors of India. The power generation companies like Indian Energy Exchange, Tata Power, and Torrent power have attained massive growth in the trading section of last week. These results are observed in the Indian Securities Market.
