Heat wave is making India's energy crisis worse - The Times of India

Heat wave is making India’s energy crisis worse – The Times of India

NEW DELHI: India’s electricity crisis that cuts power for hours, shuts down manufacturing lines and sparks street protests is expected to last for months, adding pressure on the country’s economic recovery.
Power outages and restrictions have spread to more than half of all states, and the country’s coal-dominated power system is expected to come under further strain as energy demand climbs to a recent record high in the coming weeks.
Even with a temporary respite from a sweltering heatwave that sent temperatures soaring to 46 degrees Celsius (115 degrees Fahrenheit), households and businesses face ongoing turmoil as coal stocks shrink at power plants and fuel imports stumble on prices that have risen since World War II. The war in Ukraine.
“It has become a difficult situation,” Sumant Sinha, President of ReNew Energy Global Plc, a supplier of wind and solar energy in India, said in an interview. “The whole summer will be a test.”
Rising coal and oil prices threaten to add to inflationary pressures that prompted India’s central bank to take a surprise move Wednesday to raise its key interest rate. Energy restrictions will also affect India’s already faltering recovery in industrial production.
Coal production, the fossil fuel that accounts for more than 70% of India’s electricity generation, has failed to keep pace with unprecedented energy demand from the heat wave and the country’s post-pandemic industrial recovery. Logistical crises, including a lack of railway cars to transport fuel from mines to power stations, are exacerbating the shortages.
Aditi Nayar, an economist at ICRA Ltd.
Inventories at coal-fired power plants have fallen more than 14% since the beginning of April, leaving about 100 plants at critical supply levels, according to the Institute for Energy Economics and Financial Analysis. Reserves are expected to shrink further as demand rises, and the monsoon season will follow from July.
The monsoons triggered a previous electricity crisis last year – which also caused widespread electricity restrictions – when coal mines and roads inundated, hampering production and shipments.
“If coal stocks continue to deplete at this rate, we will see a full-blown energy crisis across the country,” said Shailendra Dube, president of the Federation of All India Power Engineers, an advocacy body that makes suggestions on energy policy.
Electricity demand reached a record high of 207.1 GW on Friday and is expected to rise to 220 GW over the next two months, according to India’s Ministry of Electricity. Average spot energy prices on the Indian Energy Exchange jumped to around 10 rupees (13 cents) per kilowatt-hour, nearly three times the average in January, and the industry regulator has capped it.
At least 16 out of India’s 28 states are struggling with blackouts of between two and 10 hours a day, before conditions calmed in Rajasthan, Ashok Jahlot, the chief minister of Rajasthan said on Monday, in a Twitter message. Some areas.
The western desert state, a hub for metal smelters for textile mills, last week ordered a cut in electricity supplies to some industries by up to half. Gilot said citizens should limit their use of devices such as air conditioners and coolers in homes and workplaces.
Maheshkumar, Secretary General, Maharashtra Association for Industrial and Economic Development, Maharashtra, home to the nation’s financial capital Mumbai, is battling worsening blackouts. “Industries are concerned that they may have to cut production and reject exports and domestic orders,” he said by phone.
Anger over the erratic electricity supply sparked protests across the northern state of Punjab – India’s largest grain producer – over the weekend, with farmers blocking roads as they demanded at least eight hours of electricity a day for agricultural use. There are already concerns about the electricity supply during the rice sowing season from mid-June, Kamaljit Singh Haier, a farmer in the state’s Firozpur district, said over the phone.
In the states of Jharkhand and Chhattisgarh, coal mining, many industries are cutting production or running back-up generators with expensive diesel. “If we had to operate in this way, we would all be in the red soon,” said Philip Matthew, president of the Jharkhand Small Industries Association.
On Saturday, opposition party members marched in the streets of Jammu, protesting against the six-hour daily service outage. Power outages have hit major population centers including Uttar Pradesh, and even when supplies improve slowly as in Karnataka and Kerala, around-the-clock connections are still not guaranteed.
While Prime Minister Narendra Modi’s government does not yet face significant new opposition, the Indian economy is under pressure from rising energy prices, rising inflation and the effects of the Covid pandemic, including lower employment, said Shumita Diveshwar, senior director of India research at TS. Lombard.
“These are likely to become larger policy issues in the long run,” Deveshwar said. “If the coal crisis continues for a long time, it will increase the pressure.”

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