Is India experiencing such a severe power crisis that many states’ power has been cut off?
Let’s take a look at how bad the situation is:
The dynamics of India’s power sector are being put to test again, in less than six months after last October’s widespread power outages exposed its fault lines.
Several states across the country are facing coal shortages, resulting in power cuts as India enters the peak power demand season, which goes from April to October. Experts predict that high global thermal coal prices and lower-than-expected imports will intensify the crisis.
As per AIPEF, 12 states could face an energy crisis due to low coal stocks as domestic power demand has hit a 38-year high in the first fortnight of April 2022.
What is the cause of the crisis?
This crisis has resulted from the depletion of coal supplies at thermal power plants, the backbone of India’s power sector. Coal-based power generation accounts for approximately 53% of India’s total power capacity as of March 2022, with a capacity of around 210 gigatonnes (GW) of the total 396 GW.
The power shortage across the country has increased from 1.1 percent in October 2021 to 1.4 percent in April 2022. Meanwhile, the demand for coal has increased by 9 percent compared to last year, and reports suggest that coal stock in thermal power stations is low.
Experts predict that power outages will result from depleted coal supplies at power plants. Due to high demand and disruptions in coal supply mainly due to heavy rains, coal stocks at power plants gone down, resulting in power outages in several states.
As power plants based on imported coal cut capacities drastically in view of prohibitively high landed cost of imports caused by the Russia-Ukraine crisis, it fell on other thermal stations to keep domestic electricity supplies going.
What steps is the government taking to address the problem?
To fullfill the demand state-run Coal India produced a record 622 million tonne of coal in FY22, up from 607 million tonne in FY21. However, due to a strong increase in power demand, demand for the fuel is expanding at a quicker rate.
NTPC said tat they have made orders for 6.7 million tonne of imported coal and will require roughly 20 million tonne of the fuel from outside to meet rising demand. NTPC is paying $150-$160 per metric tonne for Indonesian coal, which is around 30% more than the price it paid for it in March of last year.
On March 26, the Union power ministry issued an advisory stating that CIL and Singareni Collieries Company should ensure that domestic coal supplies to the power sector are proportionate, and that captive coal production and renewable energy use should be increased in order to reduce coal dependency. State power generation firms and independent power producers (IPPs) were urged by the ministry in December 2021 to meet their coal demand by blending imported coal to the tune of 4%.