Singapore (Reuters) – India is seeking additional volumes of natural gas and has asked utilities to expedite completion of power plant maintenance, as part of emergency steps to stop electricity outages, according to a government note seen by Reuters.
The move follows extension of an emergency law that forces power plants running on imported coal to maximise output, as record power demand in August due to unusually dry weather, and a sharp decline in hydro and wind energy output resulted in the country’s widest electricity shortage in 16 months.
“States may ensure that all gas based power plants with whom they have power purchase agreements must be brought into use, during high demand days and non-solar hours,” the power ministry note dated Sept. 5 said.
“All efforts to be made to bring back the units under forced outage as quickly as possible,” it said, adding states should try to expedite commissioning of new renewable and thermal power plants.
The move could boost demand for natural gas, and push India to seek more LNG cargoes on the spot market. India’s LNG imports have fallen for three consecutive financial years ended March 2023, government data shows.
“Additional arrangement for gas, for running gas based stations, from GAIL (GAIL.NS) with tenders for advanced procurement for generation has been planned, during upcoming high power demand months,” the ministry said.
Rapid Power Demand Growth
India’s power demand has been growing rapidly after the pandemic, with strong economic growth boosting demand from factories and the summer heat increasing household consumption.
Coal accounted for over 73% of India’s power generation during the year ended March 2023, while renewable energy sources including wind and solar make up over 11% of total generation.
Over half of about 25 GW of India’s gas-fired capacity is non-operational due to relatively high LNG prices. The share of gas-fired power in overall output has fallen from an average of over 3% in the last decade to less than 2% currently due to high LNG prices.
Below average rain during the annual monsoon that typically runs between June and end-September is expected to result in lower hydroelectricity output in the coming months and increase stress on overall supply, the ministry said.
“The maximum hydro generation achieved this year has been less than 40 GW against 45 GW last year,” the note said.
While India’s power grid faced minimal shortages during the day due to abundant solar power generation and availability, supply fell short of demand during the night, the power ministry said in the note.
“It is pertinent to mention that the entire onus of meeting non-solar hours demand falls upon coal-fired generation,” the ministry said.
