Centre allows tolling of up to 25% for thermal power plants

Record renewable energy production helps India ease coal shortage in May – business benchmark

By Sudarshan Varadan

NEW DELHI (Reuters) – Record green energy production reduced India’s reliance on coal in May, despite a 23.5 percent growth in energy demand that helped boost coal stocks in public utilities, a Reuters analysis of government data showed.

An increased supply of renewables will go some way towards easing coal shortages in India amid extraordinarily rapid growth in demand, forcing the country to reopen mines and return to importing fuels.

The share of renewables in energy production rose to 14.1% in May from 10.2% in April. Coal made room for it, dropping to 72.4% of India’s generation from 76.8%.

However, the share of coal was still above 70.9% in May 2021.

The power shortage, driven entirely by demand rather than reduced supply, narrowed to 0.4% of requirements in May. This compares with 1.8% in April, an analysis of daily upload transmission data from the federal network regulator POSOCO showed.

Demand is expected to grow in the fiscal year ending in March 2023 at the fastest pace in at least 38 years.

Coal stocks in utilities by the end of April were at their lowest levels in years, but rose 6.3% in May to 23.3 million tons, supported by the intensification of renewable energy sources to carry more of the national electricity load.

Climate activists have blamed delays in installing renewable energy for a power shortage in April, the worst electricity crisis in more than six years. India, the world’s third largest emitter of greenhouse gases, is 37% short of its target for green electricity capacity at the end of 2022.

The data showed that electricity demand in May was 23.5% higher than the same month last year and 11.9% higher than May 2019.

The data showed that wind power generation, which usually recovers from May and tapers off in August, was 51.1% higher in May than a year earlier, while solar production increased by 37.8%. Generation from all renewable sources is up 44.1% from the previous year, the fastest pace in at least 30 months.

Analysts say the respite from the blackout in May is temporary and India’s electricity crisis is unlikely to be resolved soon. India faced its worst blackout in more than six years in April.

“Officials know very well that monsoons are affecting mining and transportation. However, no proactive action has been taken to resolve this crisis,” the Center for Research on Energy and Clean Air (CREA) said in a note last month.

“The decline in coal stocks before the monsoon in power plants indicates the possibility of another electricity crisis in the period from July to August 2022,” the authority said.

As demand peaks during the day, higher generation from solar, India’s main renewable energy source, is particularly important to relieve pressure on an aging fleet of coal-fired power plants. It also saves coal for generation at night and reduces stress on the railway network.

(Reporting by Sudarshan Varadan; Editing by Bradley Perrett and Bernadette Baum)

(The title and image for this report may have been reformulated only by the Business Standard staff; the rest of the content is automatically generated from a shared feed.)

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