[1/2]Workers unload coal from a delivery truck at a yard on the outskirts of Ahmedabad, India, October 12, 2021. Portal/Amit Dave/File Photo Acquire License Rights
SINGAPORE, Sept 4 (Portal) – India has increased its use of coal to generate electricity to prevent outages due to lower hydropower production and as renewable energy expansion struggles to keep up with record demand for electricity.
It is unusual for India’s electricity consumption to increase in August when temperatures are lower due to the annual monsoon between June and September. Demand typically peaks in May, when Indians turn on air conditioners to beat the heat and industries operate without rain-related disruptions.
However, the driest August in more than a century caused electricity generation to rise to a record 162.7 billion kilowatt hours (units), a Portal analysis of data from federal grid operator Grid India showed.
Coal’s share of electricity production rose to 66.7% in August, the highest this month in six years, according to a Portal analysis of government data. Lower rainfall meant the share of hydropower in total production fell to 14.8%, compared to 18.1% in the same period last year.
The government has repeatedly defended the use of coal, citing lower per capita emissions and increasing renewable energy production compared to richer countries.
LOW IMPORTS
Despite higher demand for coal, power plants cut their imports by 24% to 17.85 million tonnes in the first four months of the fiscal year ending March 2024, government data showed, driven by a 10.7% rise in production of state-owned coal in India (COAL.NS).
Lower imports from China, the world’s second-largest importer of the polluting fuel, have kept global thermal coal prices low in recent months.
Analysts and industry officials attribute the higher electricity consumption to farmers using more electricity to irrigate their fields because of insufficient rain, intermittency in renewable energy and increased cooling needs amid warmer-than-usual temperatures.
“Given the already strained supply situation as the weak monsoon in August led to high agricultural demand, the sudden drop in wind power generation… has further exacerbated the situation,” energy analytics firm EMA Solutions said in a LinkedIn post on Thursday.
India’s peak demand – the maximum capacity needed at any time of the day – rose to a record 243.9 gigawatts (GW) on August 31, Grid India data showed, surpassing available capacity by 7.3 GW .
The data showed that power supply fell short of demand by 780 million units in August, marking the highest shortage since April 2022, when India faced its worst power outages in six and a half years.
Weather officials expect September statewide precipitation to be in line with long-term averages, potentially providing some breathing room for utility operators.
RENEWABLE CHALLENGE
Coal’s share of production rose to 74.2% in the eight months ended August, Grid India data showed, compared with 72.9% in the same period last year and is on track to become third consecutive annual increase. The share of hydropower fell from 10.9% to 9.2%.
Total electricity generation rose by more than 108 billion units this year, dwarfing an increase of about 16 billion units in renewable energy production.
India failed to meet its target of installing 175 GW of renewable energy by 2022 and has since said it will seek to increase non-fossil capacity – solar and wind, nuclear and hydro, and bioenergy – to 500 GW by 2022 2030.
Achieving this target would require over 43 GW of more non-fossil capacity each year, almost three times the average non-fossil capacity addition over the past two years through July.
Reporting by Sudarshan Varadhan; Edited by Robert Birsel
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