Jakarta, CNBC Indonesia – India is expected to face more power outages this year as coal stocks for power generation are at their lowest in nine years ahead of the summer. Meanwhile, electricity demand is expected to rise at the fastest rate in at least 38 years.
This was stated by analysts as well as Indian government officials, quoted by Reuters, Tuesday (12/04/2022).
Power outages could certainly hamper industrial activity in Asia’s third largest economy as economic activity gradually begins to recover after months of Covid-19-related lockdowns.
The power shortage was triggered by a surge in demand of up to 1.4% over the past week, based on data from the Indian government analyzed by Reuters. This condition has improved significantly compared to last October 2021 when India faced a severe coal supply shortage with a deficit of 1%.
The southern state of Andhra Pradesh, home to factories run by automakers like Kia Motors and drugmakers like Pfizer, is expected to face an 8.7% electricity deficit, which could lead to widespread power outages.
Coal inventories at power plants at the start of this fiscal year beginning April 1 had an average nine-day supply, the lowest since at least 2014. Federal guidelines recommend power plants have at least a 24-day average supply of coal.
“The problem is that even after Coal India and the Ministry of Coal keep asking power plants to stockpile, utilities continue to reduce their stockpiles,” said Rajiv Agarwal, secretary-general of the Indian Association of Captive Power Producers.
Coal accounts for nearly 75% of India’s electricity generation.
A shortage of trains to deliver coal to power plants further exacerbates the supply crisis. The number of trains manufactured by Indian Railways per day is 415, 8.4% less than the 453 required by power generation companies.
However, the actual number of trains available from April 1-6 was 379 per day, 16% less than needed, based on minutes of a meeting between the Department of Electricity and Coal last week, verified by Reuters.
On the power supply side, total electric power output is expected to increase by 15.2% through March 2023, with demand expected to increase at the fastest rate in at least 38 years.
According to the release, this is expected to boost coal-fired power plant production by 17.6%.
India overshadowed by coal and electricity crisis
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