As utilities’ coal inventories are at the lowest pre-summer range, India has to tolerate more power cuts this year. The electricity demand is expected to rise at a brisk pace in at least 38 years, said officials. Power cuts could hinder industrial activity in Asia’s third-largest economy, just when economic activity was beginning to recuperate after months of Covid lockdowns.
As per the data of a Reuters analysis of government, the deficiency of electricity as a percentage of demand has shot up to 1.4% over the previous week. In October, it is higher than the 1% deficit in October, when India previously endured a critical coal shortage, and the 0.5% disparity in March.
During the beginning days of this financial year starting from April 1, coal inventories at power plants had an average stock of 9 days, the lowest since at least 2014. Federal guidelines suggest power plants have at least 24 days of average stock. The secretary-general of the Indian Captive Power Producers Association said that the problem is, even after Coal India and the coal ministry kept asking power plants to stock up, the utilities have been diminishing their inventories.
This year’s higher power demand has already stressed India to reduce coal supplies to the non-power sector, in spite of record production and supply by Coal India Ltd, which produces over 80% of coal in India. In order to prevent deficiency, Coal India is looking to hike the supply to utilities to 4.6% to 565 million tonnes in the financial year 2022-23.