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A heat wave of 115 degrees is exacerbating the energy crisis in India

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The energy crisis in India, which is leading to hours of power outages, shutting down production lines and sparking street protests, is projected to continue for several months, increasing pressure on the country’s economy to recover.

Power outages and power constraints have spread to more than half of all states, and the coal-dominated country’s energy system is expected to be further strained as electricity demand exceeds a recent record in the coming weeks.

Even with the temporary delay from the heat wave, which reached 46 degrees Celsius (115 degrees Fahrenheit), households and businesses are facing constant disruptions as coal reserves at power plants are dwindling and fuel imports fluctuate from rising prices. the beginning of the year. war in Ukraine.

Nflorist is napping on a hot summer afternoon in New Delhi on April 30th. Image: Anindito Mukherjee / Bloomberg

“The situation is getting tough,” Sumant Sinha, chairman of ReNew Energy Global Plc, India’s wind and solar energy supplier, said in an interview. “The whole summer will be a test.”

High coal and oil prices threaten to boost inflationary pressures, prompting India’s central bank to take an unexpected step on Wednesday to raise the key rate. Power constraints will also affect the already volatile rebound in India’s industrial production.

Coal mining, a fossil fuel that accounts for more than 70% of India’s electricity, has failed to keep up with unprecedented energy demand due to the heat and revival of the country’s industry since the pandemic. The shortage is exacerbated by logistics problems, including a lack of rail cars to transport fuel from mines to power plants.

“If electricity supply is curtailed for the industrial sector, it could delay the recovery of the manufacturing sector by at least another quarter,” said Aditi Nayar, an economist at ICRA Ltd.

According to the Institute of Energy Economics and Financial Analysis, stocks at coal-fired power plants have fallen by more than 14% since early April, leaving about 100 stations with critical supply levels. Stocks are projected to decline due to high demand, and the rainy season will begin in July.

The monsoon rains contributed to the previous electricity crisis last year – which also caused widespread electricity restrictions – when coal mines and roads were flooded, hampering production and supplies.

“If coal reserves continue to decline at this rate, we will see a full-scale energy crisis across the country,” said Sheilendra Dabi, chairman of the All India Federation of Energy, a propaganda body that develops proposals for energy policy.

On Friday, electricity demand reached a record 207.1 gigawatts and is expected to grow to 220 gigawatts over the next two months, according to the Indian Ministry of Energy. Average spot electricity prices on the Indian Energy Exchange jumped to about 10 rupees (13 cents) per kilowatt-hour, almost three times higher than the average in January, and were cover industry regulator.

At least 16 of India’s 28 states suffer from power outages between two and 10 hours a day, Rajasthan’s Chief Minister Ashok Gelot said on his Twitter account Monday before conditions in some areas eased.

The western desert state, which is the center of smelting metals and textile factories, last week ordered electricity supplies for some industries cut in half. Citizens should limit the use of appliances such as air conditioners and refrigerators in homes and workplaces, Gelot said.

Maharashtra, where the financial capital of Mumbai is located, is struggling with worsening power outages, said S. Maheshkumar, secretary general of the Maharashtra Association for Industrial and Economic Development. “Industrial companies are concerned that they may have to cut production and abandon export and domestic orders,” he said by phone.

Anger over volatile electricity supplies sparked protests in the northern state of Punjab – India’s main grain producer – last weekend when farmers blocked roads, calling for a minimum of eight hours a day for agricultural use. There are already concerns about electricity supply during rice planting since mid-June, Kamaljit Singh Haer, a farmer from the Ferozepur district of the state, said by phone.

In the coal states of Jharkhand and Chhattisgarh, many industries are cutting production or using backup generators with expensive diesel fuel. “If we have to work like this, we will all soon be in the red,” said Philip Matthew, president of the Jharkhand Association of Small Industries.

Opposition members marched through the streets of Jammu on Saturday to protest the six-hour daily shutdown. Power outages have occurred in major settlements, including Uttar Pradesh, and even where supplies are slowly improving, such as Karnataka and Kerala, connectivity is still not guaranteed around the clock.

While the government of Prime Minister Narendra Modi is not yet facing new serious disagreements, India’s economy is under pressure from high energy prices, rising inflation and the effects of the Covid pandemic, including low employment, said Shumita Deveshwar, senior director on the study of India in TS. Lombard.

“In the long run, they could become more serious political problems,” Daveshwar said. “If the coal crisis continues for a long period, it will increase the pressure.”

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