India’s power sector woes are likely to get worse as record high power demands are putting pressure on thermal power plants struggling with low coal inventories.
Over the past week, the total electricity shortage in India hit 623 million units (MU), surpassing the total shortage all of March. Low coal stocks at thermal power plants have led to power cuts this month across states including Jharkhand, Rajasthan, Uttar Pradesh, Punjab, Maharashtra, Madhya Pradesh, Bihar, Andhra Pradesh and the Union Territory of J&K.
The increasing demand due to economic recovery after the pandemic and lower power supply from imported coal-based power plants have led to increased pressure on thermal power plants using domestic coal. Delayed payments by some states to coal companies is also a key reason for low inventories at thermal power plants, according to senior government officials.
The maximum all-India power demand that was met crossed the record level of 201 GW mark Tuesday as large parts of the country reeled from the sweltering heat. The day also marked a peak shortage of 8.2 GW with 120 million units of the energy demand not met. The rising demand amid a coal crunch at thermal power plants could lead to further outages with the demand expected to peak at 215-220 GW in May and June.
Over the past week, Jharkhand faced a shortage equal to about 17.3 per cent of the state’s total electricity demand, the UTs of Jammu & Kashmir and Ladakh together faced a shortage of 11.6 per cent while Rajasthan had an electricity deficit of 9.6 per cent. Among other states with significant energy deficits in the past week were Haryana (7.7 per cent), Uttarakhand (7.6 per cent ), Bihar (3.7 per cent) and Madhya Pradesh (2.8 per cent).
Senior government officials said the key reason behind low coal supplies to Jharkhand was the delay in payments to coal companies. “They are not even paying current bills for coal,” an official said.
Parts of J&K are facing power outages for more than 16 hours. While shortage of power in the open market as states rush to meet their own requirements is a key reason for the shortfall, the depleted capacity generation of J&K’s own power projects has added to its woes. Its power projects have an installed generation capacity of 1,211 MW but they produce only a little over 450 MW. Officials say J&K has a deficit of around 2300 MW, which it needs to buy from the Northern Grid, but because of the high power tariff and unavailability, it is procuring only around 800 MW. States looking to fill gaps in their own supply have over the last week bid up the price of power to the maximum allowable level of Rs 12 per unit in the Day-Ahead Market on the India Energy Exchange.
In Rajasthan, Principal Secretary, Energy Department, and Chairman of Discoms, Bhaskar A Sawant, said power demand had risen by 31 per cent compared to the previous year, and that the coal crisis had impacted power production in the state which has a capacity to generate up to 10,110 MW of power but is only generating about 6,600 MW.
Sawant said that in such a situation, and to provide uninterrupted power supply to necessary services such as hospitals, oxygen centres, drinking water facilities, military installations, etc, it has become “extremely necessary” to opt for power cuts in rural and urban areas, excluding district headquarters and divisional headquarters.
Key thermal power plants in Punjab are facing coal shortages, leading to reduced operations at certain plants. On April 19, the Goindwal Sahib thermal plant, generating 540 MW power, had to be temporarily closed as it was left with only half-a-day coal supply. Technical issues have had the state with only 7,000 MW of the available generating capacity even as the demand hit 7800 MW, leading to power cuts ranging from 2-5 hours.
In Maharashtra, which has seen reduction in shortage over the past week compared to earlier in the month, there has been improvement in coal supplies. Principal Secretary Dinesh Waghmare said the peak demand of the state had gone over 25000 MW, about 2500 MW higher than last year. Maharashtra is one of the states with large outstanding dues to coal companies and the Centre is blaming it for non-payment. The Maharashtra power minister blames the ministries of Power and Railways for not supplying coal on time and in adequate quantity. A senior energy department officer said the state has been paying dues in instalments.
The rising demand for power across India has come at a time when international coal prices have soared due to the Russia-conflict, forcing a number of thermal plants using imported coal to shut operations as they renegotiate tariffs with state distribution companies. About 5,405 MW of imported coal-based thermal power generation capacity is currently non-operational with another 2,400 MW of such capacity operating at low levels, putting increasing pressure on thermal plants using domestic coal.
In the case of power plants that utilise domestic coal, 86 of 150 such plants currently have critically low levels of coal stock. The total inventory of coal at thermal power plants across India stands at 21.55 million tonnes as against normative levels of 66.33 million tonnes.
The Coal ministry has clarified that it had over 70 million tonnes of coal stock available to meet the needs of thermal power plants. Officials have noted that transportation of coal to thermal power plants has emerged as a key issue with a number of thermal power plants not getting the required number of rakes to meet normative stock levels.
The Railways, however, says it increased coal transportation by 111 million tonnes in FY22 to 653 million tonnes and also augmented the loading of coal to the power sector by 32 per cent in the second half of FY22. The Railways is also set to increase the number of rakes used to transport coal per day to 415, up from about 380 in the first two weeks of the month, according to government sources.
The Power ministry has also encouraged states to opt for a tolling facility under which states will be able to utilise their linkage coal in plants closer to mines which can then transmit electricity, reducing the need to transport coal. However, officials said this facility is unlikely to have an impact on the need for coal transportation until the end of May.