The mistake that can easily get your claim denied is to fail

- The share of coal based power in the total power generation capacity of the country is more than 50%

- Significant decline in investment in coal based power generation sector towards renewable energy

There has been talk of creating a power crisis in the country over the last few weeks due to coal shortages and the rise in coal prices has made headlines. Following the daily reports, it was the turn of the government to clarify several times and there were attempts to show that everything is in order in the country. Coal production and transportation are affected during this period as the coal mines in general are affected during the monsoon, but the government had to intervene as the situation worsened a bit in the current year. The industry is claiming that the situation will get worse next year if immediate action is not taken. The disruption in external supply has been more responsible for the shortage of coal in the current year than the problem inside the country. The power producers in the country, who are dependent on foreign coal, did not get enough coal from abroad and started buying coal at home, which put pressure on domestic coal plants.

On the other hand, due to non-receipt of timely bills from state power distribution companies (DISCOMs), it was not possible for power generating companies to procure coal at high prices, which in turn affected power generation. According to one estimate, power producers owe more than Rs 1.15 lakh crore to DISCOMs.

Coal shortages have highlighted the need for the country to reduce its dependence on conventional power sources and focus more on renewable energy. However, the development of renewable energy in the country has not yet taken place to such an extent that thermal power can be ignored. Looking at the country's power sector, it seems that due to low renewable energy tariffs, power distribution companies (DISCOMs) are canceling their previous power purchase agreements with thermal power producers, or insisting on renewing them. Due to this the addition of new thermal capacity is currently almost stalled. According to an analyst looking at the country's power sector, wind power generation capacity in the country is very low and its growth is slow. Corona has not led to the expected increase in solar capacity in the last two years. In addition to the huge increase in import duties on solar modules and sales, new solar capabilities that were expected to be launched soon have been delayed. Even today, 4% of the country's total power capacity is coal-based, so it is not possible to pay attention to it.

The weak outlook for the country's energy sector could have an adverse effect on the economy. Any disruption in power supply can affect industrial production. Power generation in the country does not increase as per the demand of industries. Several factors are being blamed for the current chaotic state of the power sector. One of the reasons is poor coordination and lack of planning among government agencies. The current problem may be solved with the restoration of coal supply, but the Paris Agreement requires comprehensive planning if the country is to move towards clean energy.

The move towards renewable energy has significantly reduced investment in the coal-fired power generation sector. India has set a target of increasing its renewable energy capacity to 50 gigawatts by 2020. The target is to get 60 gigawatts of electricity in 50 gigawatts through solar energy. The country's power demand is projected to increase to 215 gigawatts in the next ten years. To achieve the target of 20 gigawatts of solar energy, India will have to add 4 gigawatts per year to the installed capacity of solar energy. India's solar sector is currently dependent on imported solar equipment. Corona has affected international trade, including solar sales and modules. Disruption in the import of cells and modules has affected the increase in power installed capacity. Achieving the 2020 target will require નવા 500 billion in new investment to increase production capacity. Of this, 150 billion is likely to be raised through debt. The country's banks and non-banking financial companies are currently estimated to have lent about ૫ 150 billion to the country's power sector. While the power sector is also responsible for the high non-performing assets (NPAs) of the country's banks, it will not be easy for solar power producers to get a new રકમ 150 billion from banks or NBFCs.

It is clear that high demand for coal-based power will continue as the move towards renewable energy moves at a slower pace than expected. Given this fact, the country's policy makers have to be prepared for the emerging situation. As India is heavily dependent on imports for its fuel demand, it will also face the challenge of high fuel prices. Not only does India have to depend on imports for coal and crude oil, but it also has to meet its basic equipment requirements for renewable energy production through imports. Overall, India will have to formulate its energy policy in a way that reduces its import dependence and prevents global supply disruptions from falling on the country's economy.