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India’s power demand is rising at the fastest pace in nearly four decades, and the country is having a hard time keeping up. With its pricey coal-fired power plants, experts think that India could potentially face an energy crisis soon. An extreme heat wave in India has contributed to the country’s increased demands for energy supplies. Making things even more complicated, India is facing the approaching onset of monsoon season.
Currently, the nation expects local coal supply to fall 42.5 million tons short of demand during the September quarter. So, citizens have recently been putting more pressure on utilities to build up coal inventories through imports instead.
But, as of end-April, only one state has awarded a contract to import coal, according to a power ministry import status report. On top of that, Russia’s invasion of Ukraine has made for more expensive imports, which complicates the energy shortage matter.
“The onset of the southwest monsoon will further hamper mining and transportation of coal from mines to power stations,” said the Centre for Research on Energy and Clean Air. “If coal stocks are not replenished to adequate levels before monsoon, the country might be heading towards yet another power crisis in July-August 2022,.”
“This crisis is worse than what it was last year as the demand is actually high. A perfect storm has built up now, and there are many reasons to blame," said Rahul Tongia, a senior fellow with the Centre for Social and Economic Progress, a think tank based in Delhi. He added that India’s problem centers more around stockpiles and distribution and not a lack of coal production.
“Every time the power goes off, the machines stop, the semi-finished products get rejected and we have to start all over again," said Sandeep Mall, who owns an engineering goods factory near Delhi, India. “This erodes my competitiveness, cuts into my profits. It’s a complete mess, and is very frustrating.”