India has ramped up its utilization of coal for electricity generation as it faces increased power demand and reduced hydroelectricity output due to the driest August on record, according to Reuters reports. Typically, India experiences its peak electricity demand in May when soaring temperatures prompt people to use air-conditioners, but it’s unusual for demand to spike in August, especially when the monsoon season is underway.
The dry August resulted in a record surge in power generation, reaching 162.7 billion kilowatt hours (units), as per data from Grid India, the federal grid operator, analyzed by Reuters.
Coal’s contribution to power output climbed to 66.7% in August, marking its highest level in six years. In contrast, hydropower’s share of overall output plummeted to 14.8%, down from 18.1% during the same period last year.
The Indian government has repeatedly defended its use of coal by emphasizing lower per capita emissions compared to wealthier nations and the growth of renewable energy.
Data from the government indicates that power plants have cut coal imports by 24% during the first four months of the fiscal year ending in March 2024. This reduction is attributed to a 10.7% increase in production by the state-run company Coal India. These lower imports have contributed to the depressed global thermal coal prices seen in recent months.
Power analytics firm EMA Solutions highlighted the challenges facing India’s energy supply. The firm noted that the poor monsoon in August, along with a sudden drop in wind generation, exacerbated the already stressed supply situation. Peak demand in India reached a record 243.9 gigawatts on August 31, exceeding available capacity by 7.3 gigawatts, according to Grid India data.
Coal’s share in power output has climbed to 74.2% in the first eight months of the year, compared to 72.9% during the same period in the previous year, signaling a potential third consecutive annual increase. Meanwhile, the hydroelectric share has declined from 10.9% to 9.2%.
India previously aimed to install 175 gigawatts of renewable energy by 2022 but fell short of this target. The country now plans to boost non-fossil capacity to 500 gigawatts by 2030, encompassing solar, wind, nuclear, hydropower, and bio-power. Achieving this target will require an annual addition of over 43 gigawatts of non-fossil capacity, nearly three times the average for the past two years.
