In response to the disruptions caused by unusually dry weather, India has ramped up its utilization of coal for electricity generation.
This move aims to prevent power outages, as hydroelectric power production has decreased, and the growth in renewable energy sources is struggling to match the surging demand for electricity. It is atypical for India’s electricity consumption to spike in August, a month typically characterized by lower temperatures due to the monsoon season that spans from June to September.
Typically, the highest demand occurs in May when Indians use air conditioners to combat the heat, and industries operate without weather-related interruptions.
However, this year’s August has witnessed the driest conditions in over a century, resulting in a historic surge in power generation to 162.7 billion kilowatt hours, according to data from Grid India, the federal grid operator
Coal’s contribution to power generation reached 66.7% in August, the highest level for that month in six years, according to Reuters’ analysis of government data. Meanwhile, the share of hydroelectric power in the overall energy mix dropped from 18.1% in the same period last year to 14.8% due to reduced rainfall.
The government has defended the use of coal, emphasizing lower per capita emissions compared to wealthier nations and the growth of renewable energy production.
Despite the increased demand for coal, power plants have reduced coal imports by 24% to 17.85 million metric tons during the first four months of the fiscal year ending in March 2024, as state-run Coal India increased production by 10.7%. This decrease in imports has contributed to depressed global thermal coal prices.
Analysts and industry experts attribute the higher electricity demand to farmers using more power for irrigation due to inadequate rainfall, the intermittent nature of renewable energy sources, and increased cooling requirements due to warmer-than-usual temperatures.
Given the already strained supply situation, with a poor monsoon in August leading to high agricultural demand, the sudden decrease in wind generation has exacerbated the situation, as noted by power analytics firm EMA Solutions in a LinkedIn post.
On August 31, India reached a record peak demand of 243.9 gigawatts (GW), surpassing available capacity by 7.3 GW.
The data from Grid India reveals that in August, electricity supply fell short of demand by 780 million units, marking the highest shortage since April 2022, when India faced its most severe power cuts in over six years. Weather officials anticipate that September will bring country-wide rainfall in line with the long-term average, potentially offering some relief to utility operators.
The data from Grid India also shows that coal’s share in overall power generation increased to 74.2% in the eight months leading up to August, compared to 72.9% in the same period the previous year. This trend is on track for a third consecutive annual increase, while the share of hydroelectric power fell from 10.9% to 9.2%.
In contrast to the significant growth in overall power generation, renewable energy generation has only increased by about 16 billion units this year, dwarfed by the more than 108 billion unit increase in total power generation.
India had failed to achieve its target of installing 175 GW of renewable energy capacity by 2022 and has since set a new goal of boosting non-fossil capacity, including solar, wind, nuclear, hydro, and bio-power, to 500 GW by 2030. Achieving this target would require adding over 43 GW of non-fossil capacity annually, nearly three times the average addition of non-fossil capacity over the last two years leading up to July.
