India’s Top Utility May Add Coal Capacity As Power Demand Surges

The largest power generating company in India, state giant NTPC Ltd, could increase its coal-generation capacity as it prioritizes energy security after recent power outages.

The coal phase-out plan must wait, and “It’s too early” to talk about such phase-out, NTPC’s chairman Gurdeep Singh told the BloombergNEF summit in New Delhi on Wednesday.

The coal phase-out in India is “going to take 2-3 decades, if not more,” the executive said.

“At the end of the day, the first thing we have to look at is whether we’re able to provide 24/7 reliable, affordable power,” Singh said at the conference as carried by Bloomberg.  

Coal is the major power-generating fuel in India, accounting for 70 percent of total electricity generation. Coal’s share in the Indian power mix has been declining over the past decade, but it still is the key source of electricity in the country. Last year and earlier this year, coal shortages led to blackouts and protests in the country.

For example, the Indian states of Punjab, Uttar Pradesh, and Andhra Pradesh were forced into blackouts in April as power supplies were cut off due to a major increase in demand for summer cooling against a backdrop of low coal supplies. In the first half of April, power demand in India hit a 38-year high for the month, according to local media reports.

The blackouts continued in May and June, with power outages in Delhi just last week in very high temperatures.

China, another major economy in Asia, also faces power shortages despite a surge in domestic coal supply, as miners race to meet increased government targets for production with lower-quality coal.

Just like India, China is currently prioritizing energy security and is urging more domestic coal supply. China needs to “resolutely prevent power outages” and further raise its coal production capacity, Chinese Premier Li Keqiang said this week as a heat wave sweeps through northern and central China, driving power consumption to record levels.

By Tsvetana Paraskova for Oilprice.com

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