This paper analyses the periodic coal shortages in the post-monsoon months at power plants in India and suggests some ways forward to address them. Such periodic shortages result in increased cost of electricity as distribution companies buy power from expensive short-term sources, or generators make up for the shortage of domestic coal by importing coal or buying it in e-auctions, both of which are costlier than CIL linkage coal.

The study has three major findings. One, while current production levels are insufficient to meet the coal demand for power generation and maintaining requisite coal stock, better evacuation management would have reduced the severity of the problem. Two, it is technically feasible to increase coal production to meet the demand for coal and potentially eliminate shortages. Three, using some or all the coal sold under the special forward e-auction for power to fulfil linkage commitments can go a long way to address this problem. In short, the study suggests that this problem can be solved with better planning and coordinated action by the various agencies concerned.