India warns of possible power shortages

India is facing possible energy supply problems in the coming months due to coal shortages and a post-pandemic surge in demand, power minister R K Singh said in a report published Tuesday.

His comments come as China and European countries face energy crises that are disrupting global supply chains and sending prices soaring.

“Normally the demand starts coming down in the second half of October… when (the weather) starts cooling,” Singh told The Indian Express in an interview.

“But it’s going to be touch and go,” Singh said, calling demand for electricity “tremendous”.

“Demand is not going to go away, it’s going to increase… We’ve added 28.2 million consumers. Most of them are lower-middle class and poor, so they are buying fans, lights, televisions sets,” he said.

India’s coal-fired power stations had on average four days’ stock at the end of September, the lowest in years.

More than half the plants are on alert for outages and the government is mulling bringing idled power stations back into operation.

Coal accounts for nearly 70 percent of India’s electricity generation and around three-quarters of the fossil fuel is mined domestically.

Coal India, which produces most of the country’s supply, has said it is on a “war footing” to ensure adequate deliveries.

On top of a rise in demand as Asia’s third-largest economy rebounds following a coronavirus wave, India has been hit by recent monsoon rains that flooded mines and disrupted transport.

This pushed up prices sharply for coal buyers, including power stations.

Buying coal abroad is expensive because international prices have also soared.

“Until supplies stabilise completely, we are likely to see power outages in some pockets, while customers elsewhere may be asked to pay more for power,” Pranav Master, director for infrastructure advisory at credit ratings firm Crisil, told Bloomberg News.

“Because of imported coal prices shooting through the roof, plants running on domestic coal have had to do a lot of heavy lifting. Things are expected to get better as the rains abate.”

European countries are also facing a power crisis, with natural gas reserves at low levels and energy prices surging.

China has been hit by widespread power cuts that have closed or partially closed factories, hitting production and global supply chains.

Singh insisted that the Indian government was working hard to avert a crisis, saying that so far “there is nowhere that we have not been able to supply the quantity of power demanded”.