For more than a month, a factory around Delhi, run by Sandeep Mall, has been facing severe power outages. The factory has more than 50 machines used to produce engineering supplies, covering industries such as aviation, automotive, mining, construction and more.
Marr said that every time there is a power outage, the machine jams, and the half-processed product becomes a semi-finished product rejected by the customer, and everything has to start all over again. Although its factories are equipped with diesel generators, the cost of electricity is three times the price of the grid.
"The power outages sapped my competitiveness and cut into my bottom line. It was a complete mess, very frustrating," Marr said. It was the worst power outage he had seen in more than a decade.
Since April this year, there have been power outages across India. Factories stalled, schools closed, and demonstrations of all kinds followed. According to data from local circles, a polling organization, among more than 21,000 people in 322 regions across the country, 2/3 of the households experienced power outages; the other 1/3 of households experienced power outages for two hours or more every day.
Tourists take shelter from the sun under umbrellas while visiting the Taj Mahal on a hot summer day in Agra, June 11, 2022
At least nine states, including Haryana, where the Mar plant is located, are suffering from prolonged power outages. The main reason for the shortage of electricity is the shortage of coal.
As the world's second largest coal producer and consumer, about 1/2 of India's electricity comes from coal, and there is the world's largest coal mining company, but the per capita consumption is not high.
Currently, India mainly imports coke for steelmaking that is not available domestically. But because its coal imports are less than a quarter of its consumption, there has been a shortage of coal.
Why can't India run out of coal?
This is not the first time India has encountered coal power problems. India was already facing a crisis in October last year: more than half of the country's coal-fired power plants were at extremely low levels, or 25% below normal levels.
Since April this year, many places in India have encountered heat waves. The highest temperature in the northern and central regions has exceeded 40 degrees Celsius, and the average temperature has also set a record for more than 120 years. This has caused India's electricity demand to soar to an all-time high.
States that generate more electricity are reluctant to send excess electricity to states that generate less electricity for various reasons.
In the context of the Russian-Ukrainian conflict, global coal and natural gas prices have soared, and a large amount of imported coal has become unbearable. At this stage, at least 108 coal-fired thermal power plants in India are running low on coal stocks.
At this time, Indian Railways has again increased the number of passengers sharing the same track with freight trains, resulting in a further reduction of freight trains carrying coal across the country.
"The crisis is worse than last year because (coal) demand is actually very high. A storm has developed," said Rahul Tongia, an academic at a Delhi-based think tank.
But Tongia also pointed out that the coal power crisis does not mean that India's coal is exhausted in an absolute sense. He believes that electricity is a seasonal demand, and the establishment of power reserves requires huge time and financial costs, so India used to import coal to strengthen its supply. "However, the inventory shortages that have persisted for several months cannot be easily resolved by strengthening supply alone."
It is difficult to change the coal power ecosystem
For now, the government says it is doing everything it can to secure supplies. Coal India, the world's largest coal miner, increased production by 12 percent, the coal ministry said. The Indian government also shipped 49.7 million tonnes of coal to power generation companies in April, up 15% from a year earlier.
In addition, railroads have also cancelled more than 1,000 passenger trains to deliver more coal to fuel-starved plants.
But energy expert Daljit Singh, in his book The Future of Coal in India, points out that there is a "dysfunctional" between coal and electricity in India.
Power plants in India source coal through multiple channels, with a bewildering array of pricing mechanisms. The price a plant pays for the same coal at the same location can vary, depending on whether the plant is privately or government-owned, the date of the order, and whether power purchase agreements exist with a number of distribution companies.
Many power companies in India are plagued by debt problems. "This makes the government more inclined to own the power plants," Singh said.
The rail sector, India's largest employer, has been able to cut passenger fares for passenger transport by charging high rates for coal, its biggest commodity. Tongia said this is just one example. “There are many distortions in the Indian coal ecosystem that create the current winners and losers. This makes changing the market much more difficult than changing the fundamentals.”
Furthermore, due to insufficient investment in infrastructure, In addition, due to the lack of coordination among localities, states with more power generation are reluctant to transmit excess electricity to states with less power generation for various reasons. This has led to many people in India still "without electricity".
Crossroads near the coal-fired thermal power plant of the National Thermal Power Company
Uninterrupted power supply becomes a luxury
Currently, India has pledged to increase its renewable energy generation capacity to 450 gigawatts by 2030 to wean itself off coal. But the rise of renewable energy has not been enough to cope with the continued growth in coal use. Tongia believes that India's top priority should be to clean coal, rather than simply remove coal from the energy mix.
India has always faced difficulties in thermal coal for power generation: Indian thermal coal has high ash content and low calorific value, and is an inferior variety. Among them, coal with a calorific value of less than 4,800 calories accounts for more than 70% of the output.
As India's coal ash content is as high as 35% or more, the pollution is quite serious. Greenpeace figures show that this results in more than 100,000 deaths a year.
Counting on clean coal is a distant idea. Some experts' hopes of surviving the current short-term crisis are pinned on the arrival of the rainy season: "This time of year, South Asia, namely India and Pakistan, will experience the hottest weather before the monsoon, and these regions may continue to suffer from heat waves. until the arrival of the monsoon rains in June and July.” The
Indian economy has already been hit hard by the lack of electricity. Some industry experts said: "If the power supply of the industrial sector is cut, the recovery of the manufacturing industry may be delayed by at least another quarter."
In terms of agriculture, some Punjab farmers have begun to block roads, calling on the government to provide at least 8 hours of electricity a day to meet the needs of agricultural use. If the continuous power outage causes the grain harvest in India, the world's second largest wheat producer, to fail, then in the context of the international food crisis triggered by the conflict between Russia and Ukraine, the international food price and international food security situation may be even less optimistic.
In addition, some analysts pointed out that high coal, oil and natural gas prices may further push up inflationary pressures. India's economy is worrying under the impact of high energy prices, rising inflation and the impact of the new crown epidemic, including low employment, said Shumita Deveshwar, a senior director at an Indian research institute.
Marr said power outages have been the norm since his small factory started operating 27 years ago, but the ongoing severe and ongoing power outages have exhausted him. "It's not doing business at all. After we've created jobs and paid our taxes, is that what we're getting in return?"
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