India to face power shortage in coming weeks? What is the reason behind India’s looming power crisis?

India is expected to witness a power shortage in the coming weeks amid rising coal prices and a shortage of thermal coal in several states. The thermal power plants across the states are struggling to find the required amounts of coal amid rising demand, supply shortage and high costs. India’s power demand is expected to cross 2GW this summer, which is expected to lead to a power crisis in the country in the coming months. 

The Maharashtra State Electricity Distribution Company Ltd. had issued a notice on March 31, which read that the state has decided to temporarily curtail electricity supply to segments of agricultural power consumers in the state.

The other states reporting high supply shortages include Madhya Pradesh (9.67 MU), Punjab (4.5 MU), Haryana (4.39 MU), Jharkhand (2.29 MU) and union territories of Jammu and Kashmir and Ladakh (cumulatively 4.65 MU).

Why is India facing a power crisis?

Rapid demand growth for air conditioners and refrigeration loads has overwhelmed the existing generation of the power network. India’s power grid had reported a record load of 200,570 megawatts (MW) on July 7, 2021 at the peak of summer, as per the National Load Despatch Centre of the Power System Operation Corporation (POSOCO).

The maximum load reported this year up until now has been above 195,000 MW, including a peak of 199,584 MW on April 8th, which is just 0.5 percent below the record load of last year. The power load is only expected to increase further in the coming months with the peak of summer still weeks away.

The exceptionally high power load has been reported even before the most intense part of summer, which implies an impending power crisis, as it comes at a time when global thermal coal prises remain elevated due to the Russia-Ukraine conflict that has disrupted trade flows and crippled supply amid additional demand from Europe that has imposed sanctions on Russian coal.

Imported coal hence, is too expensive for price-sensitive markets like India, as per S&P Global Commodity Insights. 

What steps is the government taking to avoid the impending power crisis?

• Union Minister of Power and New & Renewable Energy RK Singh assured recently that the government will be able to meet the rising power demand. The Minister informed that the government has taken several steps to ensure smooth coal supply to thermal power plants.
• The Union Minister informed that the states have also been allowed to allot up to 25 percent of their coal supply to thermal power plants in other states for power supply when needed. This is expected to help reduce the price of coal transport and therefore the price of power as well. 
• The states have also been allowed to import up to 10 percent of their coal demand amid a shortage of coal in the country. This is expected to increase the overall gross calorific value (GCV) of coal resulting in better power yield since imported coal is higher GCV.
• The Minister also added that the increasing power demand is a good sign for the economy and the government will be able to meet it.
• The Minister said that he expects the peak power demand to touch almost 220 GW or 2,20,000 MW during intense summers. 

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