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Business News/ News / India/  India boosts coal use to stop power outages as hydroelectricity output falls

With an aim to stop outages caused by lower hydroelectricity output, India has stepped up the use of coal to generate electricity as an increase in renewables is struggling to keep pace with record power demand, according to Reuters reports. 

India's electricity demand typically peaks in May when people crank up air-conditioners to beat the heat. It is unusual for India's electricity use to spike in August when temperatures are lower due to the annual monsoon. 

Hence, the driest August has resulted in power generation surging to a record 162.7 billion kilowatt hours (units), a Reuters analysis of data from the federal grid operator Grid India showed.

The data shows that coal's share in power output rose to 66.7% in August, the highest in six years. Lower rainfall led to the share of hydropower in overall output plunging to 14.8%, compared with 18.1% in the same period last year.

The Indian government has repeatedly defended the use of coal citing lower per capita emissions compared with richer nations, and rising renewable energy. 

The government data showed that power plants have slashed imports by 24% on 17.85 million metric tons during the first four months of the fiscal year ending in March 2024 due to a 10.7% increase in production by state-run Coal India.

Lower imports by the world's second-largest importer of the polluting fuel behind China have kept global thermal coal prices depressed in recent months, Reuters reported. 

In a LinkedIn post on Thursday, power analytics firm EMA Solutions said, “Given the already stressed supply situation, as the poor monsoon in August resulted in high agricultural demand, the sudden fall of wind generation ... has further aggravated the situation."

India's peak demand - the maximum capacity required during any time of the day - rose to a record 243.9 gigawatts (GW) on Aug. 31, the Grid India data showed, exceeding available capacity by 7.3 GW, as per Reuters reports. 

Coal's share in output rose to 74.2% in the eight months that ended in August, the Grid India data showed, compared with 72.9% in the same period last year and on track for a third consecutive annual increase. The share of hydro fell from 10.9% to 9.2%.

India failed to achieve a target to install 175 GW in renewable energy by 2022 and has since stated that it would try to boost non-fossil capacity - solar and wind energy, nuclear and hydropower, and bio-power - to 500 GW by 2030.

Achieving that target would require over 43 GW more of non-fossil capacity every year, nearly three times the average non-fossil capacity addition over the last two years to July.


(With Reuters inputs)

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Updated: 04 Sep 2023, 07:03 AM IST
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