A Huge Red Flag? India Shutters Power Plants Citing Lack Of Demand

Authored by Irina Slav via OilPrice.com,

Half of India’s power generation capacity using coal and nuclear power is being shut down because of lackluster demand, the Indian Express reports, adding that some of the shutdowns have been temporary, lasting just a few days, but other power plants have been closed for months.

Some 65.13 GW in generation capacity has been shut down at one point or another, with the earlier shutdown made in July. There seems to be simply not enough demand for electricity, which is worrying as a lot of this demand comes from the industrial and commercial sectors.

This is a marked departure from 2012, when the worst blackout in years hit 20 of India’s 28 states, plunging 700 million people into darkness. The blackout was caused by a surge in demand that the local utilities found themselves unable to meet.

Now, demand is on the decline for India’s coal-powered generation plants as renewables encroach on their territory: coal-fired plants currently account for 63 percent of the country’s energy mix, down from 73 percent three years ago. The country has one of the most ambitious renewables programs in the world, which should result in India deriving 55 percent of its energy from renewable sources by 2030.

To date, the country has 83 GW in renewable generation capacity, with another 31 GW under construction, and a further 35 GW awaiting bidders. All this taken together and with hydropower capacity added, India could cross the 200-GW threshold by 2022, according to the government.

Yet there are also seasonal factors at play. A longer monsoon season and an early arrival of winter have served to dampen electricity demand faster than usual. The longer monsoon period affected activity in India’s industrial centers, with some of them registering declines in demand for electricity rather than the usual increase for that time of the year.