Explainer: Why India Is Witnessing Power Outages in a Heatwave

[00:00:00] If you like me have caught yourself multiple times a day complaining about how this year is hotter than last, you're not alone. March 2022 has been India's third warmest March since 1901 and there has been at least

[00:00:27] 26 heatwaves since the start of March and these can last anywhere between 4 to 10 days. On 11th April Delhi broke a 72-year-old record with a temperature hitting 42.6 degrees Celsius and the absence of summer rains which usually keeps the check on the heat has also made the heatwaves worse.

[00:00:43] While climate change is one of the main reasons why it is so hot, what has made it even more frustrating is the constant power cuts which are occurring across the country. As per the power ministry's own data, 14 out of 36 states in union territories are

[00:00:56] currently facing a power shortage and there are multiple reasons behind this power crunch as well with the most obvious one being record high power demands in this scorching heat. Adding to this is the revival of the economy as COVID cases across the country have come

[00:01:08] down and businesses have started operating at full capacity. But the big reason behind these power cuts is the shortage of coal in India. And barely six months ago in October 2021, we saw a similar crisis with several states facing electricity outages due to prolonged monsoons.

[00:01:24] But why is India witnessing a power crunch again that too in the summers? What is leading to this constant power outage and the big question what is causing this heat? To understand this, we spoke to Siddip Sivastava, a Chhattisgarh based lawyer and activist

[00:01:38] Sanjay Vashish, director of Climate Action Network South Asia and Dr. Narendra Taneja, a leading energy expert. Get tuned in to the big story, the podcast where we dissect the headline making news for you and I'm your host, Ahmed.

[00:02:03] If you're having a deja vu moment about listening to this episode, you won't be wrong. Six months ago in October, I covered the escalating coal shortage in India due to the monsoon season and one of the main takeaways from that episode was the lack of reforms in management

[00:02:16] of resources in the coal industry. And no significant reforms despite that crisis has led us to our current situation, that the country witnessing a coal shortage again resulting in power outages. In more than 100 thermal plants in India, coal stocks have fallen below the critical

[00:02:31] mark which is about 25% of the required stock and in over 50 plants it has fallen below the 10% mark. But the big question here is why is this happening and why again? The big factor this time around is demand.

[00:02:44] Amid scorching heat waves and businesses returning to full capacity, the power demand has skyrocketed in multiple states across India. Another big factor is heat waves and the obvious reason for that is climate change

[00:02:54] which has exaggerated that heat and there's a reason as well to why it is so hot this year. Now usually summer rains help keep the heat in check and even though there have been a few showers since summers began, they have been relatively weak.

[00:03:06] According to an IMD official, the interaction between the western disturbances and cooler winds from the south which caused light rains over northern India has been low, occurring only once this summer does not significantly impact on the climate.

[00:03:17] Sanjay Vishay, the director of Climate Action Network South Asia says that we are stuck in a vicious cycle with coal being born to deal with the heat but it also further adding to climate change which is then contributing to that same heat.

[00:03:29] India is almost dependent, 50% dependent on coal for energy production and it is very normal that during monsoon when coal supply is disrupted to coal power plants because of floods and movement of, you know, wagon is not easy.

[00:03:49] So keeping that in mind it's a normal thing that, you know, it is the shortest is there. Also sometimes shortest is also done because of the political reason. I'll not go into that.

[00:04:01] But I think one of the reason now the power shortage is there is because of high temperature. In some places it has even, it is forecasted to touch even 50 degrees. We have never seen that kind of temperature rise.

[00:04:15] I think Churu has been touching in Rajasthan touching 49 degrees but now it's not Churu, other towns also which are going to touch higher temperature. So because of higher temperature, higher energy demand is there which is obvious. More desert cooler, more air conditions. Air conditions are affordable now.

[00:04:35] People basically use air conditions in some households. Desert coolers are used when the dry heat is there and then later on when the humidity come they start using air conditions. So that has been the normal way of using air condition.

[00:04:51] The coal requirement is higher because of higher increase of consumption. Not only that, I think other biggest problem with coal power plant is and this happened in 2015 and I'm forcing that's going to happen soon in next one or two months already

[00:05:12] is the water availability for core power plants will go down because of high heat. And that would mean that the coal based power generation will be difficult to meet the demand of the people.

[00:05:28] And that is one reason why we haven't talked, it's a vicious circle on the one side you know you are burning coal because it's very hot because of climate change and the other side you're causing climate change because of greenhouse gases that goes into atmosphere

[00:05:44] and then your coal is dependent on water which is again dependent on natural resource available based on the optimum temperature conditions. So it's a vicious circle where we are trapped, our energy system is trapped and I think we need to get out of it.

[00:06:00] And this heat wave has also pushed demands to record levels already. According to an Indian Express report the maximum all-in-their power demand that was met crossed the record level 201 gigawatt mark on 26 April as a country reeled from the scorching heat.

[00:06:13] The report adds that this rise in demand in coal crunch resulted in 120 million units of energy demand not being met. But why are power plants not being able to meet this increase in demand? Do power plants not plan for a surge in demand especially during the summer weeks?

[00:06:27] We took this question to Sudeep Srivastava, a Chhattisgarh based lawyer and activist who said that after the coal crunch in October last year the center allowed power plants based on imported coals to run on domestic coal since monsoon last year

[00:06:38] and the delay in corrective measures have further worsened this crisis. What has happened? They allowed power plant based on the imported coal to run on Indian coal. So those power plants were consuming a lot of coal supply produced between monsoon to now.

[00:06:57] So those power plants ultimately when the prices are cheap they want they purchase imported coal. When the prices are higher they want to ship to Indian coal. So are we going to... it's a free market economy.

[00:07:13] If you are looking for profit then you are also ready for the loss. There is no obligation on people of India or government of India to suit every individual's balance sheet that profits are coming. The excess consumption of coal due to this crisis.

[00:07:33] Another important factor of why power distribution companies are not being able to keep up a demand is related to payment of coal. And this is divided into two parts. First purchase of imported coal and second the astronomical amounts to power distribution companies or coal suppliers like coal India.

[00:07:50] So let's take the issue of imported coals first, the price of which has skyrocketed. The global coal prices as monitored by markets insider were hovering about $326 per tonne on 26 April against $120 per tonne in January 2022. And this is not where coal prices usually hover.

[00:08:07] In 2020 coal prices were $50 per tonne which means that they have increased 6 fold in just over 2 years. The ongoing Russia-Ukraine crisis has also forced a number of thermal plants in India which used imported coal to shut down operations due to the high import price.

[00:08:21] According to an Indian Express report about 5,405 megawatts of imported coal based thermal power generation capacity is currently non-operational with another 2400 megawatts of such capacity operating at low levels, putting increasing pressure on thermal plants using domestic coal.

[00:08:37] This leads us to domestic power distribution companies run by state governments asking power generator companies for more coal. And though coal India, the single largest producer of coal in the world has stated that over 70 million tons of coal stock is available to meet the needs of thermal

[00:08:51] power plants, there seems to be some hesitancy to provide the same according to a money control report. According to money control, across the supply chain of power production via coal, payments have been due. Coal India according to that report is owed about Rs 12,300 crore and power generator

[00:09:06] companies in turn are owed about Rs 1.1 lakh crore by power distribution companies. This payment delay across the supply chain weighs heavily on the entire sector leading to power generation companies defaulting on payments and risking insolvency.

[00:09:21] The report points out that though coal India has not expressly stated that it is not moderating supplies to power plants due to non-payments, data from the company reveals otherwise. Certain power plants were not considered in the quote unquote critical or super critical category due to non-payment of dues.

[00:09:37] According to Narendra Taneja, non-payment of dues is also one of the main reasons why there have been so many power cuts because distribution companies are not able to purchase power. Well the prices are of course also part linked to them because if the

[00:09:51] utilities or the distribution companies they have not been able to make a payment then their capacity to purchase power either from power exchange or from some other sources get limited and then the indulgent power cuts just because they don't have power. So there are multiple reasons.

[00:10:13] You see like in some states and some cities is more acute than in other places. It depends on the overall the first financial discipline and the financial capabilities of these companies. So in some places we are seeing power cuts mainly because the companies

[00:10:34] have not been they are not able to purchase power. If the demand is let us say 300 megawatt the capacity is only to buy 150 megawatt then they just buy 150 megawatt and then they go for they

[00:10:48] rotate basically you know eight or five countries area cut there then give it to other area. Yeah it's not that you know is that is not that the India doesn't have installed capacity. While there are several factors which have led to this power crisis the big

[00:11:05] fact which does come out of this is India's heavy reliance on fossil fuels and the dire need to swiftly switch to renewable energy. You can find detail explainers and stories on this ongoing crisis on the Qwins website.

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