India is facing its worst power crisis in six years. On one hand, the country’s industries are showing signs of revival after the lifting of Covid-19 curbs, and on the other, the heatwave has set in early across many states.
These two factors have pushed up the demand for power.
Mercury levels have soared above 40 degrees Celsius in Delhi, Punjab, Haryana, Uttar Pradesh and Rajasthan states, forcing residents and commercial establishments to increase the use of air-conditioners.
Coal mines are now under pressure as coal is the dominant fuel used to generate electricity in the country, and most thermal plants are facing a decline in coal stocks. India’s largest coal producer and supplier Coal India Limited claims that in April it increased its supplies by 14.2% to thermal plants, but this was not enough to cope with soaring demand.
The state-owned miner claimed it was coordinating with the ministries of coal, power and railways to build up stocks at power plants. Coal stocks in many thermal plants are below critical levels, with some plants reporting it has fallen below the 10% mark.
Another major factor in this crisis is the rise in the price of coal on the global market. Many thermal plants built in India’s coastal regions were depending on imported coal from countries like Indonesia to run their plants.
With the rise in prices, these plants have either curtailed production or shut down. They are also now depending on Coal India to keep their plants running.
This is now posing a huge logistical challenge for Indian railways, which now has to send coal to more power plants. This has led to an increase in the turnaround time and the state-owned rail operator has curbed the supply to other sectors to meet the demand for thermal plants.
The situation has become so grim that the railways had to cancel as many as 240 passenger trains to speed up the movement of coal across the country.
States experiencing heat waves have now imposed power rationing to cope with the demand-supply mismatch. For consumers, it is a lethal combination of having to go without electricity for 2-8 hours in sweltering heat. The Delhi state government warned that the power crisis could hit critical services like metro trains and hospitals.
This is the situation in many states including Punjab, Haryana, Maharashtra, Uttar Pradesh and Andhra Pradesh. According to the latest data from the Power System Operation Corporation, the peak power shortage last week doubled from 5.24 GW on Monday to 10.77 GW on Thursday. Experts say the summer has just started and the heatwave could worsen in May and June.
One of the worst-hit by this crisis is the non-power industries such as aluminum, steel and cement that rely on coal as an essential input for production. Recently, 10 industry bodies appealed to the prime minister to increase the supply of coal to non-power industries.
In their letter to the prime minister, they noted that low fuel supply to the non-power sectors had compelled managements to procure coal at higher prices on the open market and purchase power from exchanges, further inflating the cost of power.
Many of these industries also depend on domestic coal to run captive power plants for their own consumption. They said the situation was worsening by the day and many firms would be forced to cut down production or even close down operations.