NEW DELHI – (Reuters) – Fewer power cuts are likely in India this summer after a surge in output at Coal India (COAL.NS) helped generators amass record stocks, a turnaround for Narendra Modi who had to battle a power crisis within months of becoming prime minister last May.
Fast-track mine approvals, tighter production oversight and more flexibility in coal sales have helped power station stocks recover from a six-year low hit in October, vindicating Modi’s pitch to voters as the state leader who brought round-the-clock power to industrial Gujarat.
As Modi prepares to mark his first year in office and seeks to fulfil a poll promise to provide power to all of India’s 1.2 billion people by 2019, power stations hold 28 million tonnes of coal, a 38 percent jump from a year ago, government data shows.
“The situation is improving,” said K. Raja Gopal, head of the thermal power business at construction, power and real estate conglomerate Lanco Infratech (LAIN.NS), pointing to recent growth in Coal India output. “More needs to be done but 8 to 9 percent didn’t happen before.”
India, the world’s third-largest coal buyer, is expected to cut imports by a fifth in the fiscal year to March 31 from an estimated 200 million tonnes in the previous year. Power companies have relied on imports for 15 percent of their coal needs.
India suffered one of its worst blackouts in 2012 due to a shortage of coal plus outdated transmission lines and an over-burdened grid. Power shortages shaved 0.4 percent off GDP in 2012/13, industry body FICCI estimates.
Coal stocks fell to zero at New Delhi’s Badarpur power station last October but now there is enough to last 43 days going into the peak demand season. The situation is similar at many other power plants across India, where over 60 percent of electricity is generated by coal.
State-controlled Coal India also holds pit-head stocks of 53 million tonnes that can be shipped before the four-month monsoon season starting in June, a company source said.
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