India faces worsening power outage risks

According to an internal power ministry presentation reviewed by Reuters, India is anticipated to confront a bigger coal shortfall in the quarter ending September as a result of higher power demand, increasing the likelihood of widespread power disruptions.

Due to stronger growth in power consumption and decreased output from some mines, the energy-hungry country anticipates local coal supply to fall 42.5 million tonnes short of demand in the September quarter, 15% higher than originally forecast.

The bleak projection highlights the severity of India’s fuel shortfall at a time when yearly electricity consumption is expected to climb at the quickest rate in at least 38 years, and global coal prices are approaching record highs due to a supply shortage caused by the Russia-Ukraine dispute.

In recent days, India has increased pressure on utilities to increase imports, threatening supply cutbacks of domestically mined coal unless power plants build up coal inventories through imports.

However, one of the slides in the presentation stated that most states had yet to award contracts for coal imports, and that if no coal was imported, Indian utilities would run out of coal by July.

According to a power ministry import status report reviewed by Reuters, only one state has given a contract to import coal as of end-April.

According to the presentation, India forecasts domestic coal supply of 154.7 million tonnes, which is 42.5 million tonnes less than the predicted requirement of 197.3 million tonnes in the September quarter. It had earlier predicted a 37 million-tonne shortfall.

According to two government sources familiar with the subject, the presentation was delivered on Friday in a virtual conference in which the federal coal and power ministers were present, along with top energy officials from the federal government and the states.