India is suffering the worst energy crisis in years

Indians are turning up air conditioning as they still work from home, while lights come back on in offices and factories with the end of COVID restrictions, upending electricity demand patterns amid a heat wave and the country’s worst blackouts in years.

India has traditionally seen a peak in demand late in the evening when people return home, but this has shifted to mid-afternoon when temperatures are hottest, according to government data, in due to record daytime residential use, a resumption of industrial work, and increased use of irrigation pumps to harness higher solar gain.

Relentless daytime demand in the world’s third-largest electricity market means utilities have been unable to cut output even during peak solar supply periods, further straining strains networks already overwhelmed by heat waves in South Asia.

For power generators in India, this has meant a bigger than usual reduction in coal stocks, leaving them understocked ahead of the hottest part of the year, with supply lines disrupted. coal due to wagon shortages which add to their woes. .

India’s power shortage highlights potential challenges for other countries in the region, such as Pakistan and Bangladesh, with even smaller generation capacities.

Pakistan has also faced severe blackouts, with some rural areas receiving just six hours of electricity a day.

“As the work-from-home culture has gained social acceptance, offices have also opened up across India, resulting in a combination of higher domestic and business demand,” said Prabhajit Kumar Sarkar, Managing Director and CEO of Power Exchange India. Limit.

A senior official at federal grid operator POSOCO agrees. “The hybrid work culture is definitely causing a major peak in electricity demand in the afternoon,” he said on condition of anonymity because he was not authorized to speak to the media.

A hybrid working model, where people work some days in the office and others remotely, is a popular choice among companies emerging from the COVID-19 pandemic.

Industry experts say the Indian government could consider measures such as variable tariffs to discourage daytime use to ease the electricity shortage.

“Regulators could consider flattening the curve by incentivizing off-peak power consumption by cutting tariffs,” said RK Verma, former chairman of India’s Central Electricity Authority.

Raising fares at peak times is another option, he added.

The Federal Department of Energy did not respond to an email from Reuters seeking comment on the matter.

Analysts and experts have warned that grids will remain under pressure for years, with peak demand at noon adding to persistent high use overnight when solar power supply drops.

Incessant demand for power

India’s total power generation in the first four months of 2022 increased by an average of 6.1% year-on-year and 24.3% from COVID-affected levels in 2020 , according to data from POSOCO.

In April, with the start of the heat wave, average electricity production increased by 11.9% compared to 2021 and by 56.8% compared to 2020.

Average power consumption over 1445-1530 hours in the afternoon jumped 15.5% from a year ago, compared to an increase of 11.5% for the full month, according to data from POSOCO.

On April 29, when India suffered some of its worst blackouts in years, its electricity supply rose to 207.1 gigawatts (GW) in the afternoon, the highest since July 2021. But that was still 4.7% below demand, causing network outages.

There was also no slack in electricity demand at night, with an average supply of 180.3 GW over 2245-2300 hours in April, 8.5% more than a year ago. , on intensive use of air conditioners.

“There is a definite likelihood of continued power outages due to the current hot conditions,” said Indian Captive Power Producers Association Secretary General Rajiv Agarwal.

India’s electricity demand this year is expected to grow at the fastest rate in at least 38 years, officials say.

Risk of further network outages

These sustained demand rates weighed on coal inventories at power plants, which fell to just enough for 8 days of use – the lowest in at least nine years for this time of year – and 42% in below India’s target at end-April.

India’s worst energy crisis in more than six years is partly attributable to the shortage of coal, which has accounted for more than 75% of its power generation on average since 2015.

Amid a push for cleaner air, coal power plant expansion has lagged, registering less than an 18% gain since 2015 and expanding just 4% in the past five years, the data shows. from the BP Statistical Review of World Energy.

This compares to a near doubling of renewable sources over the past five years.

With the heat wave in South Asia still raging and temperatures expected to remain high through the summer, low coal inventories remain a concern for utilities and the government.

New Delhi has already unveiled measures to ease the power shortage, including canceling passenger train services to free up tracks for the movement of coal and invoking an emergency law to restart production at coal-fired power plants. inactive dependent on imports.

But it may be years before India can free itself from the risk of further network outages, industry analysts say.

“We need to focus on adding generation capacity that can supply during night hours, such as nuclear, hydro or coal, which can take at least 3-5 years to come online,” said Victor Vanya, director of energy analysis company EMA Solutions.

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