India's power crisis is likely to last for months, putting pressure on its economic rebound. Power shortages frequently caused hours of blackouts, factory production lines shut down, and triggered street protests Blackouts and power rationing have spread to more than half of the States, and power demand is expected to exceed the recent record high in the next few months. The country's coal-based energy system is overwhelmed.
Some time ago, the scorching heat wave was as high as 46 degrees Celsius. Although it has eased recently, families and enterprises continue to face power outages; Coal inventories at power plants have decreased, while fuel imports have fallen due to soaring prices since the conflict between Russia and Ukraine.
"The situation has become difficult," sumant Sinha, chairman of renew energy global PLC, an Indian wind and solar energy supplier, said in an interview. "The whole summer will be a test."
Hinder recovery
High coal and oil prices could exacerbate inflationary pressures, prompting the Bank of India to unexpectedly decide to raise key policy interest rates on Wednesday. Power rationing will also hit India's faltering industrial recovery.
Coal and fossil fuels account for more than 70% of India's electricity generation, but electricity supply is dwarfed by unprecedented energy demand due to hot weather and industrial recovery after the pandemic. Logistics obstruction, including the lack of wagons to transport coal to the power plant, exacerbated the power shortage.
"If the power supply of the industrial sector is limited, the recovery of the manufacturing industry may be delayed for at least another quarter," said Aditi Nayar, an economist at ICRA Ltd.
Coal shortage
According to the Institute of energy economics and financial analysis, the coal stock of coal-fired power plants has fallen by more than 14% since early April, leaving the supply of about 100 home appliance plants at a critical level. Due to strong electricity consumption, the stock may shrink further, followed by the monsoon season from July.
Decline in coal stock
Monsoon rains triggered a power crisis last year and led to widespread power rationing - when coal mines and roads were flooded and production and transportation were blocked.
"If coal stocks continue to be consumed at this rate, we will see a comprehensive power crisis across the country," said shailendra Dubey, President of the All India Federation of electrical engineers.