Sunday, August 14, 2022

India instructs coal plants to operate at full capacity in order to alleviate power shortage

To address a supply shortage that is causing widespread blackouts, the administration took the unprecedented step of invoking a rarely utilised clause in power legislation. The order is in effect until Oct. 31, according to a letter posted on the electricity ministry’s website.

India is experiencing a power shortage as the country experiences a scorching summer. Coal production, which accounts for more than 70% of electricity generation, has fallen behind, and the energy infrastructure is projected to be further strained in the coming weeks as demand surpasses a previous high.

This scenario has worsened as worldwide coal prices have risen due to scarcity, forcing power plants that rely on imported fuel to cut capacity in order to avoid losses. The benchmark Newcastle coal futures in Asia have gained almost 145 percent this year.

Only 10 gigawatts of India’s 17.6 gigawatts of coal-fired power generation capacity are currently operational, according to the power ministry. According to the report, most of the facilities have contracts with buyers that prevent them from passing on growing fuel costs.

JSW Energy Ltd., which operates two of these units, claims that using imported coal to generate energy has become prohibitively expensive. In an interview, Chief Executive Officer Prashant Jain noted that lower generation from these plants, combined with rising temperatures, is leading to electricity shortages.

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