Increasing coal Prices- Its Impact on the Power Sector

Context:

• The war between Ukraine and Russia has led to shortage of supplies of coal from Russia, This has a major impact on the power sector.

Background-

• It is well known that from the past few months that the domestic supplies of coal in India has been come down.
• And now due to the tensions in Russia-Ukraine have led to high international prices of coal.
• The impact has already been felt by Few states in India with many power cuts, as there will be more power consumption in the summer season.
• This dependence on import of highly prized Will increase the cost of production of the Discoms and other energy producers.

Reason for high prices:

• The primary reason is the war in Russia and doctrine which has led to the shortage of supplies of the coal.
• Unless coal India ramps up its coal production up to 700,000,000 tonnes per year in the next fiscal year it cannot meet its domestic demand.
• Australia and Indonesia which are the two important countries terms of import of coal, the prices of Australian coal was at peak recently.