The monsoon deficit is 11% so far (compared to the long-term average) and 36% in August, increasing power demand but squeezing supply sources. On the supply side, therefore, there has been total reliance on coal-fired power generation to meet rising demand, which in turn is driven by rising temperatures and the need to pump more groundwater for irrigation.
Hyder power has been hit due to drought in much of peninsular India. According to a statement issued by the Ministry of Electric Power on September 5, the maximum power generation capacity of hydropower this year has been less than 40 GW, compared with 45 GW last year; as a result, thermal power has been left to shoulder heavy tasks. The surge in demand in July and August is a reminder that coal will remain India’s mainstay, even though almost all new capacity will come from renewables (93% in FY23). Solar (71 GW) and wind (44 GW) account for about a quarter of the total installed capacity of 423 GW, but account for 7% and 9% of power generation respectively, while thermal power accounts for 73%, according to Vasudha Foundation analysis. In the absence of viable battery storage technology (solar power with battery storage is priced around Rs 12 per unit), solar and wind power cannot be relied upon to meet sudden surges in power demand, especially during “non-solar hours” ( reading in the evening and beyond). Although peak demand in “solar hours” – a record 241 GW on September 1 – was easily met, the shortfall was evident at this time of day, according to the ministry’s statement.
The ministry has rightly said that power generation companies should ensure that coal is imported for blending purposes so that there is no load shedding in the coming months. Generation interruptions should be minimized by scheduling unit maintenance during periods of low demand. Due to this forced blackout, 12-14 GW of thermal capacity cannot be used. At the same time, time-of-use pricing is needed to smooth the demand curve over the course of the day so that surges in demand do not put undue stress on the grid and its wiring systems. At the same time, battery storage technology must become viable. Only then can India’s power system handle high power supply from renewable sources.
That said, the current power situation is not worrisome. Coal production in July and August was well above 60 million tons per month, an increase of at least 13-18% from last year’s levels. Coal-fired power plants have about 30 million tons of reserves, enough to meet demand for about 11 days. However, coordination between the ministries of coal, power and, most importantly, the railways is crucial to ensure that coal is transported from pitheads to plants on time amid the typically deteriorating power conditions in the coming months.