* State-run Coal India unable to meet rising demand
* Fall in hydro power adding to grid problems
* Lack of grid connectivity across regions another
* Potential blackouts an early test for Modi government
* Thermal coal imports seen up 11 pct to 150 mln tonnes in
(Adds comment from trader, Indonesia)
By Krishna N Das and Douglas Busvine
NEW DELHI, Aug 29 Half of India's thermal power
stations have less than a week's supply of coal on hand,
according to weekly data, the lowest level since mid-2012 when
hundreds of millions of people were cut off in one of the
world's worst blackouts.
There was a sharp fall in power output on Thursday from a
plant in the western state of Gujarat that left India more than
9,000 megawatts short of peak demand, according to two officials
at the state grid operator.
Any grid collapse would cast doubt on the crisis management
skills of the new government led by Prime Minister Narendra
Modi, whose achievement in ensuring 24-hour power supplies as
premier of Gujarat state helped him to election victory in May.
Commenting on Thursday, Power and Coal Minister Piyush Goyal
said: "I don't know about the possibility of a breakdown ...
There is a problem, I think, with many of the coal supplies."
The shortage has come about as a fall in hydroelectricty
generation due to weak monsoon rains forced the government to
ask coal-based power stations to raise output, an industry
India suffered unprecedented power cuts on July 30-31, 2012,
that affected 620 million people - nearly a tenth of the world's
population - in 22 states across the north and east of the
Asia's third-largest economy relies on coal to generate more
than two-thirds of its electricity, but power plants are running
short because state behemoth Coal India Ltd has been
unable to meet rising demand.
Cautious steps to open up coal mining to competition have
been thrown into chaos by a Supreme Court ruling this week that
all coal block allocations since 1993 were illegal. These went
to steel, cement and power firms that had to use the coal
In a second ruling next Monday, the court will decide
whether to scrap the awards of more than 200 of these 'captive'
blocks, or instead fine licence holders, promising further
uncertainty before new mines can ramp up output.
The Indian Express reported on Friday that 10 out of 13
thermal plants that have suffered forced outages are state-run,
raising questions over exactly how Coal India allocates
supplies. A Coal India spokesman had no immediate comment.
Many of these regional state power companies have imported
less than required due to financial stress, having run up losses
because they must pay market prices for coal but can only sell
power at regulated rates.
"The current coal stock situation is indeed alarming," said
Viresh Oberoi, chief executive of mjunction, an online
commodities trader that is a joint venture between Tata Steel
and Steel Authority of India Ltd.
India produced 565 million tonnes of coal in the fiscal year
to March, making it the world's third-largest producer. Even so,
it is also the fifth-biggest importer of coal and the crunch
could offer a sales opportunity to exporters.
Indonesia expects to raise its shipments to India this year
by 10 million tonnes to around 100 million, Bob Kamandanu,
chairman of the Indonesian Coal Producers Association, told
Central Electricity Authority (CEA) power figures for the
situation on Tuesday, accessed by Reuters on Friday, showed that
50 of India's 100 thermal power stations had enough coal to last
less than seven days.
Taken as a whole, India's thermal power generators have six
days of supplies - far short of the 15-30 days set as an
operating norm by the CEA.
As well as being short on capacity, India's power network
lacks the connectivity needed for areas suffering shortages to
tap supplies from other regions.
Utility Adani Power Ltd has reduced output at its
Mundra facility in Gujarat by about 2,300 megawatts due to a
shortage of coal, two senior officials at the state-owned Power
Grid Corp of India Ltd said.
As a result of the cut, India's total generation capacity on
Thursday was about 9,110 MW less than its potential demand at
peak periods of the day. That gap was nearly twice as wide as at
the beginning of the week, according to Power Grid data.
Adani declined to comment.
An unusually hot August has meant that city dwellers have
kept their air conditioners running.
States that could be hit with blackouts include Maharashtra,
whose capital is the financial hub Mumbai, and the northern
state of Haryana, one power grid official said, declining to be
named as he was not authorised to speak to the media.
Friday was a holiday in parts of India, including
Maharashtra, easing power demand, but it is expected to ramp
back up once the entire country gets back to work on Monday.
(Additional reporting by Sumeet Chatterjee and Aman Shah in
Mumbai, Nidhi Verma in New Delhi and Yayat Supriatna in Jakarta;
Writing by Douglas Busvine; Editing by John Chalmers and Alan