How India plans to shield businesses from power cuts this summer

For Saurabh Verma, who runs a label printing plant in Ghaziabad in the northern Indian state of Uttar Pradesh, power cuts are one of his biggest headaches.

The director of Shiv Graphics and GRV Labels says that his company relies on backup generators, inverters and uninterruptible power supply (UPS) systems. “These outages lead to production downtime, causing delays in delivery schedules, increased costs, and reduced profits,” he says.

“Critical equipment, such as computers and machines, can be damaged due to power surges when the electricity comes back on.”

Many parts of India are facing cuts and there are widespread concerns that the country could face a power crunch this summer, as the mercury rises and with forecasts of heatwaves.

“There will be supply shortages this summer,” says Ishan Chaturvedi, director and co-founder of Vareyn Solar. “The point to be noted here also is that this summer is going to be one of the hottest on record due to global warming, hence, energy demands will be surging as well.”

Last year, when India was hit by scorching heatwaves, there was a wave of blackouts across the country, due to a number of reasons: a rise in use of air conditioning; an increase in appetite for power, as the economy opened up after Covid; and shortages of coal, as Russia’s invasion of Ukraine disrupted international supplies and pushed up prices.

India depends on coal for about 70 per cent of its electricity generation. But as the country’s appetite for energy increases amid a growing population and economy, it is becoming increasingly difficult to meet its needs, according to industry specialists.

“Power is already scarce and India has [a huge] population and a lot of things are happening and lots of industries are coming up,” says Amitansu Satpathy, director of Best Power Equipments, an India power solution company.

Despite a projected slowdown in growth, India is expected to be the world’s fastest-growing major economy this year. The International Monetary Fund projects the country to grow at 6.1 per cent.

India, with its more than 1.4 billion people, is also set to push ahead of China this year to become the world’s most populous country.

As urbanisation and industrialisation continue, the International Energy Agency forecasts India’s energy demand to increase by 3 per cent every year over the next decade.

Well aware of the threat of a power crunch this summer, and to prevent a repeat of last year, the government has taken a series of steps to try to limit disruption.

India’s Ministry of Power invoked an emergency law this month which forces power plants that run on imported coal to run at full capacity to boost output due to expectations of record demand for electricity in the coming weeks. The ministry expects demand to hit a peak of 229 gigawatts next month.

The ministry has also ordered central and state generation companies and independent power producers to take necessary measures “to import coal for blending at the rate of 6 per cent by weight … so as to have sufficient stock at their power plants for smooth operations [until] September 2023”, it said.

The government has also been working on improving the transportation of the domestic supply of coal to ensure that it reaches the power plants. This includes the purchase of 100,000 new railway wagons and increasing the railway network in coal mining areas.

India has the fourth-largest coal reserves in the world, and is also the second-largest importer of the substance, due to its enormous requirement for the fossil fuel.

“Most of the requirement of coal in the country is met through indigenous production and supply,” the Ministry of Power says. “The focus of the government is on increasing the domestic production of coal and to eliminate non-essential import of coal in the country.”

However, some experts are sceptical about whether the steps being taken by the ministry will be enough to meet India’s electricity needs this summer.

“There will be a lot of erratic supply,” says Mr Satpathy. “The government is taking lots of measures for tightening the generation part to be more and more stable. But still distributing those powers into the utility areas is a real issue.”

The measures are expected to help alleviate the problems to some extent. “The steps are in the right direction to meet the expected high demand,” says Akhilesh Awasthy, chief operating officer at Hindustan Power Exchange.

There’s “a remote possibility of some of the demand not being met”, he says. He still expects there to be an impact on prices from the anticipated surge in electricity use.

“The coming months will see an increase in demand owing to the onset of summer, and it is expected to have a major impact on the power availability to consumers across states as well the short-term power prices,” says Mr Awasthy.

India is increasing its use of green energy as it seeks to diversify away from costly fossil fuel imports and bring down its carbon emissions. Prime Minister Narendra Modi has set a net-zero target for 2070 and is aiming for half of the country’s electricity to be generated by renewable sources by 2030.

“Renewable energy will have an important role in addressing the power supply challenges that the country would face with the onset of summers,” says Mr Awasthy.

“The presence of rooftop solar and other renewable energy sources in the country’s portfolio can help mitigate the power sector challenges. At the same time, it is to be noted that these technologies are still at a nascent stage and further research and development will have to be carried out in utilising these technologies to the fullest.” “Coal-fired plants are not enough to take care of a surge in demand,” Mr Chaturvedi says.

He says that renewable energy production and distribution needs to be scaled up to meet the country’s needs, even as India will continue to depend on coal for many years to come.

“Interstate renewable electricity supply is crucial to curtail electricity shortages,” says Mr Chaturvedi. “India has been ramping up its transmission network aggressively in the past 10 years and will soon have an inter-connected centralised grid.”

With this, “excess power of any state can be sold in peak demand hours to any state within India, which will act as a balancer so as to every state can profit from its surplus or every state can circumvent their demand surge as and when needed”, he adds.

Storage of renewable energy is another area that India needs to work on to ensure it can meet its electricity needs.

“Though India has sufficient generation capacity, transmission and distribution infrastructure needs to be strengthened further to ensure 24/7 power availability across the country,” says Raghavendra Mirji, senior vice president and business head of Godrej Electricals & Electronics, a business of Indian conglomerate Godrej & Boyce. “India should consider speeding the building of green corridors for the evacuation of excess power generated.”

But while India is likely to feel the heat this summer when it comes to its power supplies, citizens also have a role to play in minimising the impact.

“It is also recommended for consumers to adopt energy-efficient practices and use appliances that consume less power,” says Mr Mirji.