Why is India facing the worst power crisis in more than 6 years?

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New Delhi — India faces the worst power crisis in more than six years as heat waves burn over vast areas of South Asia and cause widespread power outages.

Here is a summary of the factors behind the crunch.

Why is India facing a power crisis?

Electricity demand reached a record high in April due to the surge in demand for air conditioning due to the heat wave of this year and the economic recovery caused by the removal of all restrictions on industrial activities related to COVID.

The new hybrid working model, adopted since the outbreak of COVID-19 in 2020, has caused millions of Indians to work from home and increase the daytime electricity usage of their homes. At night, when solar power stops and air conditioning demand surges, the gap between power supply and power consumption often widens.

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Many power plants have run out of fuel as a result of aggressive production increases. The average coal inventories held by utilities were the lowest during this period for at least nine years.

Despite record production by state-owned Coal India, which accounts for 80% of domestic coal production, many utilities were unable to restock because Indian Railways could not supply enough trains, Coal India.

What is India doing?

Due to the crisis, India overturned its policy of zeroing steam coal imports and urged power companies to continue importing for three years.

It has also enacted an emergency law to start power generation at all plants operating on imported coal, many of which are now closed due to soaring international coal prices.

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Due to low inventories, Coal India is forced to divert its supply to utilities at the expense of the non-power sector. The state-owned Indian Railways canceled passenger trains to free the tracks for the movement of coal.

India also plans to reopen more than 100 coal mines that were previously considered financially unsustainable.

Who will be affected by the crisis?

Almost half of the 35,000 respondents nationwide faced a power outage this month, according to the Civil Survey Platform Local Circles.

Factories in at least three states were forced to close for hours as authorities struggled to handle demand.

Due to the restricted supply of coal to power plants operated by energy-intensive industries, factories began drawing electricity from the grid, raising industrial costs and putting further pressure on overworked coal-fired power plants.

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Electricity consumption in eastern Orissa, home to the country’s largest aluminum smelter and steel mill, increased by more than 30% from October to March, almost 10 times the national average growth rate.

What’s next?

Authorities and analysts expect India to face more power outages this year as coal inventories are low and electricity demand is expected to grow at the fastest pace in at least 38 years.

Power generation from coal-fired power plants, which account for nearly 75% of India’s annual electricity production, is expected to grow by 17.6% this year, the highest rate in more than a decade.

Coal India production and train shipping can be hit during the June-September monsoon season each year. (Report by Sudarshan Varadhan, edited by Himani Sarkar)