Analysis: Dark summer nights: India faces high risks of power cuts after years of coal, hydro power neglect

Indian Energy Exchange

08/03/2023 08:25

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      Summer nighttime peak supply gap estimated at 1.7% 
    

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      Peak hydro output seen down 18% in April from year ago
    

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      Government officials downplay concerns
    

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      Coal power, hydro capacity addition needs to be expedited
    

  
    By Sudarshan Varadhan, Sarita Chaganti Singh and Matthew 
Chye
       SINGAPORE/NEW DELHI, March 8 (Reuters) - India faces a
high risk of nighttime power cuts this summer and in coming
years, as delays in adding new coal-fired and hydropower
capacity could limit the country's ability to address surging
electricity demand when solar energy is not available.
    A rapid addition of solar farms has helped India avert
daytime supply gaps, but a shortage of coal-fired and hydropower
capacity risks exposing millions to widespread outages at night,
 government data and internal documents reviewed by Reuters
show.
    India's power availability in "non-solar hours" this April
is expected to be 1.7% lower than peak demand - a measure of the
maximum electricity requirement over any given time, an internal
note by the federal grid regulator reviewed by Reuters showed.
    April nighttime peak demand is expected to hit 217 gigawatts
(GW), up 6.4% on the highest nighttime levels recorded in April
last year.
    "The situation is a little stressed," Grid Controller of
India Ltd (Grid-India) said in the note dated Feb. 3.
    While Indians looking to beat the heat this summer will want
steady power for their air-conditioners, night time outage risks
threaten industries that operate around the clock, including
auto, electronics, steel bar and fertiliser manufacturing
plants.
    "If there is a power cut even for one minute, paper pulp
gets blocked and messes up the delicate process and causes
hundreds of thousands of rupees in losses," said P.G. Mukundan
Nair, former chief of an Indian paper industry body who has been
in paper manufacturing for nearly three decades.
    "Even the smallest interruption in power supply will create
havoc," Nair said.
    The electricity deficits this summer could be worse than
expected, as Grid-India's shortage forecasts were made weeks
before India's weather office predicted heat waves between March
and May.
    
    EMERGENCY STEPS
    India's federal power secretary Alok Kumar downplayed
concerns, saying the government had taken "all steps" to avoid
power cuts.
    "We are making capacity available to all states at
competitive rates," Kumar told Reuters.
    After the Grid-India report, the government brought forward 
maintenance at some coal-fired power plants and secured extra
gas-fired capacity to run to try to avert outages, another
senior government official said.
    As much as 189.2 GW of coal-fired capacity is expected to be
available this April, according to Grid-India's February note.
That would be up more than 11% from last year, according to
Reuters calculations based on Grid-India data.
    Together, coal, nuclear and gas capacity are expected to
meet about 83% of peak demand at night.
    Hydro power will be crucial not only to meet much of the
remaining supply but also as a flexible generator, as coal-fired
plants cannot be ramped up and down quickly to address
variability in demand.
    However Grid-India has forecast peak hydro availability in
April this year will be 18% below what it was a year earlier,
when output was boosted by favourable weather conditions.
    Imported coal-based power plants would be required to crank
up output to up to 55% of total potential from 21% in February,
while domestic coal-fired units will have to increase output to
75% of potential from 69% in February, Hetal Gandhi, Director-
Research at CRISIL Market Intelligence and Analytics said. 
   "The burden of increased supply will definitely be borne by
coal and gas," Gandhi said, adding achieving it would be a "tall
order".
        
    MORE CAPACITY NEEDED
    The nighttime outage risks are in sharp contrast to daytime.
Supply in daylight hours has been bolstered by nearly four-fold
growth in solar capacity over the past five years, in line with
Prime Minister Narendra Modi's Paris climate agreement pledge to
curb carbon emissions.
    As of last April, solar boosted renewables' contribution to
as much as 18% of India's generation in the middle of the day. 
    The strain comes after sundown, as coal-fired capacity has
grown only 9% over the last five years.
    Around midnight through April last year, jostling for power
was intense, with buyers making bids for five times more power
than sellers offered, a Reuters analysis of data from the Indian
Energy Exchange, the country's most liquid electricity trading
platform, showed.
    The widening demand-supply fault lines highlight the need to
 expedite coal capacity additions to avert outages in the next
few years.
    Construction of as many as 26 coal-fired units with a
capacity of 16.8 GW has been delayed by more than a year, data
from the Central Electricity Authority shows, with some plants
facing delays of more than 10 years.
    Projects under construction are being stalled by local
protests over environmental concerns, legal challenges over
compensation for land acquisition, and availability of labour
and equipment, according to officials at power plants.  
    Hydro and nuclear power capacity additions face tougher
obstacles, as they are hobbled by lack of foreign investment and
opposition from critics over safety and environmental issues,
boding ill for power supply down the track.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Nighttime power demand and supply on India Energy Exchange     https://tmsnrt.rs/3ISEnx4
Difference between average and peak demand within time blocks   
https://tmsnrt.rs/3ZxqUSs
India's power capacity addition growth by energy source    https://tmsnrt.rs/3L1oV4s
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Sudarshan Varadhan and Matthew Chye in Singapore
and Sarita Chaganti Singh in New Delhi; Editing by Sonali Paul)
 ((Sudarshan.Varadhan@thomsonreuters.com; +919810393152;
Twitter: https://twitter.com/sudvaradhan @sudvaradhan))