According to the sources, India is soon to face a power shortage. Coal inventories are at their lowest and demand for electricity is rising rapidly as compared to the previous year, sources said.
Power cuts could be seen in the industries due to the circumstances, which would eventually affect the developing third-largest economy in Asia, which started to recover after the pandemic.
Power shortages as a percentage of demand soared to 1.4% last week, a Reuters analysis of government data showed that India was higher than the 1% deficit in October when it last faced a serious coal shortage.
At the beginning of the new financial year, the coal inventories at power plants had an average of nine days’ stock. Later, the guidelines tell us to have stock for up to 24 days.
Rising Power Demand – India facing power shortage
According to weather officials, the power demand will rise in summer, with high temperature than normal in April.
Harry Dhaul, director-general of the Independent Power Producers Association of India, said,
“An unprecedented change in weather has resulted in peak demand shooting up after midnight due to soaring air-conditioning use.”
According to a Federal Energy Department memo audited by Reuters, total production for the year to March 2024 is expected to increase by 15.2%, and demand is expected to grow at the fastest rate in at least 38 years.
Accordingly, the coal-fired power production is up by 17.6%. Higher power demand this year forced India to cut coal supplies to the non-power sector.
Due to the Russia-Ukraine situation, global coal prices are trading at substantial premiums to average levels in 2021, which might exacerbate the financial troubles of debt-ridden power distributors.
Fitch Ratings warned that “high international coal costs would limit any meaningful growth in coal imports,” and that domestic supply could be harmed during the yearly monsoon season.
Edited by – Vanshika Sahu
Published by – Mohd Faizan
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