Small Indian Factories Face Blackouts as Coal Stocks Plunge

Blackouts have started to hit households and smaller Indian factories and steel mills as coal inventories at many power plants plunge while electricity demand soars amid warmer weather and much lower hydropower output.Demand has been exceeding supply in recent weeks, leading to power cuts for households in some areas, as well as smaller factories and smelters, Bloomberg reported on Monday. The record El Niño has led to the weakest monsoon season in India in a decade and raised temperatures to above normal for this time of year. This has strained power supply at a time when weak rainfall is curbing hydropower generation and coal stocks at dozens of coal-fired power plants are at critically low levels.The share of coal-fired power plants in India running on critically low levels of coal inventory has soared in recent weeks to over 40% of all operational coal plants, government data showed at the end of September.By October 1, as many as 85 plants had coal stocks below 25% of their normative requirement, highlighting growing pressure on the coal supply chain, Finland-based Centre for Research on Energy and Clean Air (CREA) said in its July-September quarterly analysis of India’s power sector. The strong El Niño and the hotter weather have increased the pressure on India’s coal supply, which power plants are now burning much faster amid low hydropower output and surging demand. The strain on coal stocks and coal-fired power generation starts to affect the economy, industry officials told Bloomberg. Small steel mills in India’s central state of Chhattisgarh are facing outages of 10 to 12 hours per day, which forces these plants to reduce production, Manish Dhuppad, general secretary at the Chhattisgarh Mini Steel Plant Association, told Bloomberg. The power cuts are raising energy costs for factories and steel mills as they need to switch to generators consuming expensive fuel. Households are affected, too. For example, in Uttar Pradesh, India’s most populous state with more than 240 million residents, some villages are being hit by as much as seven hours per day of blackouts. By Charles Kennedy for Oilprice.comMore Top Reads From Oilprice.comOil Stuck Between Middle East Escalation and Russia-Ukraine Energy TruceSupertanker Rates Slip From Record HighsOil Jumps 2% as Saudi Attacks and Tanker Strikes Revive Hormuz Fears