The country is seeking to increase natural gas supplies and has asked utilities to expedite the completion of maintenance work at power plants as part of emergency measures to stave off power outages, according to a government report seen by Reuters.
The move comes after an extension of an emergency law forcing power plants using imported coal to maximize output as unusually dry weather led to record electricity demand in August and sharp declines in hydro and wind output , causing the country’s most widespread power shortage in 16 months.
“Countries can ensure that all natural gas-fired power plants with which they enter into power purchase agreements must be commissioned on high-demand days and non-solar hours,” said a Sept. 5 note from the Ministry of Power.
“Every effort will be made to restore units that have been forced to shut down as quickly as possible,” the report said, adding that states should work to speed up the commissioning of new renewable and thermal power plants.
The move could boost demand for natural gas and push India to seek more LNG cargoes on the spot market. India’s LNG imports through March 2023 have fallen for three consecutive fiscal years, government data showed.
“In the coming months of high electricity demand, GAIL has planned additional arrangements for natural gas, operating petrol stations and conducting advance procurement tenders for power generation,” the ministry said.
Rapid growth in electricity demand
After the epidemic, electricity demand has grown rapidly, strong economic growth has boosted factory demand, and hot summer has increased household consumption.
Coal accounted for more than 73% of electricity generation in the year to March 2023, while renewables such as wind and solar accounted for more than 11% of the total.
More than half of India’s roughly 25 GW of gas-fired capacity is not operating due to relatively high LNG prices. Due to high LNG prices, the share of gas-fired power generation in total electricity generation has fallen from an average of more than 3% over the past decade to less than 2% now.
Below-average rainfall during the annual monsoon period from June to the end of September is expected to lead to lower hydropower generation in the coming months and add to overall supply pressure, the ministry said.
“Maximum hydropower generation achieved this year was less than 40 GW, compared to 45 GW last year,” the report said.
India’s power ministry said in the report that due to the abundance and availability of solar power generation, the Indian grid faces minimal power shortages during the day, but supplies are in short supply at night.
“It is worth mentioning that the sole responsibility for meeting demand during non-solar hours falls on coal-fired generation,” the ministry said.