India may faces high power cut risks after years of coal, hydropower neglect

India's power sector has been facing various challenges, including neglect of coal and hydropower, which has led to a higher risk of power cuts. India's power sector is heavily reliant on coal, which accounts for around 70% of the country's electricity generation. However, the country has been struggling to meet its coal demand due to a lack of domestic production and logistical challenges.

Imported coal-based power plants would be required to crank up output to up to 55% of total potential from 21% in February, while domestic coal-fired units will have to increase output to 75% of potential from 69% in February, Hetal Gandhi, Director- Research at CRISIL Market Intelligence and Analytics said.

Moreover, India has also neglected its hydropower potential, which accounts for only around 13% of the country's total installed capacity. The country's hydroelectric power potential remains largely untapped due to various reasons, including environmental concerns, land acquisition issues, and bureaucratic hurdles.

A rapid addition of solar farms has helped India avert daytime supply gaps, but a shortage of coal-fired and hydropower capacity risks exposing millions to widespread outages at night, government data and internal documents reviewed by Reuters show.

India's power availability in "non-solar hours" this April is expected to be 1.7% lower than peak demand - a measure of the maximum electricity requirement over any given time, an internal note by the federal grid regulator reviewed by Reuters showed.

April nighttime peak demand is expected to hit 217 gigawatts (GW), up 6.4% from the highest nighttime levels recorded in April last year.

"The situation is a little stressed," Grid Controller of India Ltd (Grid-India) said in the note dated Feb. 3.

The neglect of coal and hydropower has led to a situation where the country's power grid is heavily dependent on gas-based and renewable energy sources. While renewable energy sources have seen a significant increase in capacity over the past few years, their intermittent nature and the lack of storage infrastructure make them unreliable sources of power during peak demand periods.

This situation has led to an increased risk of power cuts in India, especially during peak demand periods such as summer months when air conditioning usage is high. The government is taking various measures to address these challenges, including boosting coal production, promoting hydropower projects, and investing in energy storage infrastructure.

Construction of as many as 26 coal-fired units with a capacity of 16.8 GW has been delayed by more than a year, data from the Central Electricity Authority shows, with some plants facing delays of more than 10 years.

In conclusion, India's power sector faces various challenges, including neglect of coal and hydropower, which have led to a higher risk of power cuts. The government is taking steps to address these challenges, but it will take time to achieve a sustainable and reliable power supply for the country.