As part of emergency measures to avert power outages, India is requesting increased natural gas quantities and has ordered utilities to speed up the completion of power plant maintenance, according to a government note obtained by Reuters.
As a result of high power consumption in August due to extremely dry weather and a dramatic decrease in hydro and wind energy output, the country experienced its largest electricity shortage in 16 months. The move comes as a result of the extension of an emergency statute that requires power plants to use imported coal to maximize output.
“States may ensure that all gas-based power plants with whom they have contracts to purchase electricity must be brought into service, during peak demand days & non-solar hours,” the power ministry memo dated Sept. 5 stated.
It said that governments should work to hasten the commissioning of new renewable & thermal power facilities. “All efforts to be made to get back the units under enforced outage as quickly as possible,” it stated.
The action may increase India’s demand for LNG cargo on the spot market and increase the country’s demand for natural gas. According to data from the government, India’s imports of LNG have decreased for three straight fiscal years ending in March 2023.
The ministry stated that additional arrangements for gas from GAIL (GAIL.NS) for operating gas-based stations, along with tenders for advanced procurement for generation, have been scheduled for the next peak power demand months.
RAPID GROWTH IN POWER DEMAND
After the pandemic, India’s demand for power grew quickly as robust economic growth increased demand from industry, and the summer heat increased household use.
Over 73% of India’s power production in the year ending March 2023 came from coal, while more than 11% of it came from renewable energy sources like wind and solar.
India has roughly 25 GW of gas-fired capacity, more than half of which is not in use because of expensive LNG. Due to high LNG prices, the proportion of gas-fired electricity in total output has decreased from an average of over 3% during the last ten years to less than 2% at the moment.
According to the ministry, less rain than usual during the annual monsoon, which generally lasts from June to the end of September, is projected to reduce hydroelectricity output in the following months and put more strain on the supply as a whole.
According to the note, “the maximum power production achieved this year has been under forty GW against 45 GW last year.”
The power ministry noted in the letter that while India’s power grid saw few shortages during the day due to significant solar power generation & availability, supplies fell short of demand during the night.
It is important to note that coal-fired generation bears the complete responsibility of supplying non-solar hours demand, according to the ministry.