Blackouts are erupting throughout areas of India due to a scorching summer and severe coal shortages, sparking fears of a fresh power crisis that could engulf Asia’s third-largest economy.
Electricity supply has been cut off in states such as Punjab and Uttar Pradesh in the north and Andhra Pradesh in the south due to a rise in demand.
Moreover, customers are being forced to either bear the heat or seek out more expensive backup solutions as a result of the blackouts outage, which could last up to eight hours in some areas.
Although blackouts disruptions are typical in India, this year’s condition indicates a “looming power catastrophe,” according to Shailendra Dubey, chairman of the All India Power Engineers Federation, an advocacy group.
Blackouts are caused by a lack of coal, a fossil fuel
Blackouts caused by a lack of coal, a fossil fuel that accounts for 70% of India’s electrical generation, are threatening to stymie the $2.7 trillion economy, which is trying to re-ignite all of its engines after suffering a record contraction due to the pandemic.
Meanwhile, they’re also fueling inflation at a time when policymakers are battling to contain spiralling energy prices caused by Russia’s conflict in Ukraine.
In a tight domestic and worldwide market, small and large industries, including metals, alloys, and cement producers, must spend more on energy.
According to Nomura Holdings Inc., chronic coal blackouts might impact the country’s industrial output and cause another “stagflationary shock.”
In a research note published on April 19, analysts at the Japanese bank led by Sonal Varma stated, “Both demand- and supply-side factors are responsible.”
“As a result of the reopening and as the country approaches the high summer season, electricity consumption has increased, but supply has been delayed due to a lack of railway rakes to transport coal and decreasing coal imports.”
India is aiming for a full year of growth after its gross domestic product dropped by 6.6% from March to March 2021.
However, headline inflation hit a 17-month high in March, above the central bank’s 6% objective, creating headwinds.
The heatwave is adding to the jump in demand, which is being fueled by a strengthening economy and a renaissance in industrial productivity.
Heatwave warnings have been issued by the weather service in various sections of the country as temperatures have continued to rise.
According to the Indian Meteorological Department, the temperature in the nation’s capital, New Delhi, reached 108.3 degrees Fahrenheit (42.4 degrees Celsius) on April 9, the hottest day in five years.
In March, the national average temperature climbed to over 92 degrees, the highest level since records began in 1901.
According to Atul Ganatra, president of the Cotton Association of India, blackouts outages have disrupted operations at some textile mills in the country’s western and southern regions because the high cost of cotton prevents them from investing in expensive diesel-powered generators and other alternatives.
According to him, blackouts outrage will dramatically reduce cotton consumption.
Lower domestic output, transportation difficulties due to a restricted number of rail carriages, and fewer imports due to high marine cargo prices have all contributed to dwindling coal supplies at Indian power plants recently.
According to data from the Ministry of Power, as of April 18, electricity producers had stock that could last only nine days on average.
Despite increasing output by 27% in the first half of this month, state-owned Coal India Ltd., which owns some of Asia’s largest coal mines, claimed it couldn’t keep up with “strong demand.”
Moreover, to be sure, a summer coal shortage has long been a given, owing to Coal India’s inability to scale up production and weak infrastructure.
When the pandemic slowed industrial output, the drop in demand hindered capacity expansion even more.
Last year, the coal crisis resurfaced, exposing the fractures as the economy reopened, exacerbated by high import prices.
Power plant stockpiles plummeted to their lowest level since 2017, while metal makers asked for more supplies in September.
According to Debasish Mishra, a Mumbai-based partner at Deloitte Touche Tohmatsu, “there could be more suffering on the horizon.” With monsoon rains approaching, mines and highways would certainly flood, slowing coal production and delivery.
Also Read: ASSAM TO PAY POWER BILL OF 20 LAKH HOUSEHOLDS PER MONTH
