Weak rains to spur more demand for coal as hydropower falters

New Delhi: The deficient monsoon rainfall has hurt hydropower generation significantly, putting more pressure on thermal power generators. The demand for coal is seen rising by 15-20% this year over India’s annual demand of 600 million tonnes (mt), two analysts said on Tuesday.

Hydroelectric generation in April and June fell by 8.8% from last year, showed a research report from Barclays Capital Ltd that used data from Central Electricity Authority of India.

Hydropower generation capacity in northern India is at 15,400MW, while thermal power generation capacity stands at 29,900MW, data in the Barclays report showed.

On Tuesday, half of India faced a massive power outage when the northern and eastern electricity distribution grids failed in the afternoon. On Monday, northern India saw the worst blackout in the last 11 years as the northern grid went down.

Another analyst, Arun Kejriwal of KRIS, said he was skeptical if power generators will be able to import more coal as many of them are out of funds. Severe shortages of power will hit the nation as a result, he said.

“Demand for power is up because of the low rains as temperatures are high and there is bigger need for farm irrigation,” said Kejriwal. “Yet, how many power producers will be able to import expensive coal? The result will be more blackouts this year.”

Kejriwal said he saw India’s annual coal demand rising by 15-20% this year.

ruchira.s@livemint.com