India’s coal crisis

India’s coal crisis

Subject – Economy

Context – The Prime Minister’s Office reviewed the coal stock situation in India’s thermal power plants in a meeting with senior officials of the coal and power ministries.

Concept –

• India’s thermal power plants currently have an average of four days worth of coal stock against a recommended level of 15-30 days, with a number of states highlighting concerns about blackouts as a result of the coal shortage.

• Coal and lignite fired thermal power plants account for about 54 per cent of India’s installed power generation capacity but currently account for about 70 per cent of power generated in the country.

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Power Purchase Agreements

• It is a contract between the one who generates electricity and one which is looking to purchase it.
• It defines all of the commercial terms for the sale of electricity between the two parties, including when the project will begin commercial operation, schedule for delivery of electricity, penalties for under delivery, payment terms, and termination.