India is facing its worst power crisis in more than six years as heat waves cause power outages in large parts of South Asia.
Why is India facing power crisis?
Economic recovery has pushed electricity demand to record highs in April, with demand for air conditioning rising this year due to uncontrolled heatwaves and the lifting of all cove-related restrictions on industrial activity.
The new hybrid work model adopted since the Kovid-19 hit in 2020 has resulted in millions of Indians working from home, increasing electricity consumption during residential days. The gap between supplying and eating at night often widens when the solar supply is cut off and the demand for air conditioning increases.
Aggressively increasing production has depleted the power of many power plants, with average coal reserves near utilities at a minimum for at least 9 years this time of year.
Despite state-run Coal India’s record production, which accounts for 80% of domestic coal production, Indian Railways has not been able to meet many utility stocks due to its inability to supply adequate trains to Coal India.
What is India doing?
The crisis has forced India to reverse its policy of reducing thermal coal imports to zero and has asked utilities to continue importing for three years.
It called for an emergency law to start production at all plants running on imported coal, many of which are currently closed due to high international coal prices.
Low inventories have forced Coal India to shift supplies to utilities at the expense of the non-power sector. State-run Indian Railways has canceled passenger trains to clear tracks for coal transportation.
India is planning to reopen more than 100 coal mines which were not financially viable before.
Who is affected by the crisis?
According to the citizen-survey platform LocalCircles, nearly half of its 35,000 respondents from across the country said they had experienced a power outage this month.
Factories in at least three states have been shut down for hours as authorities struggle to meet demand.
As the supply of coal to power-intensive industrial power plants is limited, factories start pumping electricity from the grid, increasing the cost of industry and putting extra work on coal-fired power plants.
Power consumption in the eastern state of Orissa, home to the country’s largest aluminum smelter and steel mill, increased by 30% in October-March, an average of about ten times the national growth.
Officials and analysts expect India to face even more power shortages this year due to low coal and demand for electricity, which is expected to grow rapidly in at least 38 years.
Power generation from coal-fired power plants, which account for about 75% of India’s annual power generation, is expected to grow 17.6% this year, the highest rate in a decade.
Coal India’s production and shipments are likely to be affected during the annual June-September monsoon season.