As many as 63 of the 135 coal-fired power plants in Asia’s third largest economy have two days — or less — of coal supplies, India’s Central Electricity Authority (CEA) said in a report on Tuesday. Coal stocks at 17 of them have been run down to zero, it added.
In total, 75 plants are running with five days worth of coal or less, the level the CEA deems to be “super critical.” While these plants won’t go offline in a matter of days, they are extremely vulnerable to any further disruption to coal supply or a spike in demand.
“Demand is not going to go away, it’s going to increase,” Singh told The Indian Express. “We’ve added 28.2 million consumers. Most of them are lower-middle class and poor, so they are buying fans, lights, televisions sets.”
“[There] is nowhere that we have not been able to supply the quantity of power demanded,” he said.
However, if India is not able to fix the coal crunch soon, “power sector companies face the prospect of importing coal at significant cost,” damaging the country’s economic recovery, according to analysts at Nomura.
While air conditioning use typically eases towards the end of the year, relieving pressure on the power grid, India will celebrate one of its biggest festivals, Diwali, in November, and that could lead to another spike in consumption.
“With power demand likely to rise amid the continued economic normalization and upcoming festive sales, supply-side disruptions pose an important near-term downside risk to growth momentum,” Nomura’s analysts Sonal Varma and Aurodeep Nandi said in a note on Wednesday.
A power crunch in China has already triggered blackouts for households and forced factories to cut production, threatening to slow the country’s vast economy and place even more strain on global supply chains.
— Manveena Suri contributed to this report.