New Delhi, India – As temperatures soar above 40 degrees Celsius in the village of Hasanganj in the northern Indian state of Uttar Pradesh, a nearly 14-hour power outage in the area means bananas sold by Ramesh, a one-name fruit seller, rot faster than normal with no fans to keep it cool. With sales plummeting, his nerves at home erupt, and his children can’t sleep or study in the sweltering heat.
Ramesh told Al Jazeera that the power outage “aggravated” their problems.
As the heat wave spread in parts of northern India from late March until early May, demand for energy soared, loading power lines, leading to major outages in several parts of the country as coal at thermal plants ran out.
The chain of events, especially with summer coming sooner and hotter than expected, has renewed the call for more coal to be drilled and imported even as coal production in India continues to rise steadily. Global coal prices have soared since the start of the Ukraine war, sending India’s import costs up anywhere from 50 percent to 100 percent, at a time when the rupee has fallen to record lows, making imports more expensive.
As a result, on May 7 the Ministry of Environment Some coal mines were allowed to expand production Up to 50 percent, from the current 40 percent, without seeking the environmental approvals that are usually mandatory.
– Kanchi Kohli (@kanchikohli) May 10, 2022
The day before, the Ministry of Electricity ordered all power stations that fired on imported coal to operate at full capacity and allowed energy producers to pass on the increase in tariffs to consumers.
said Tim Buckley, director of Climate Energy Finance, an Australian think tank. “But there is a huge, huge cost to the Indian people.”
The basic cost that Buckley is referring to is the actual price of electricity. While most of India’s thermal and renewable electricity is sold through long-term contracts, there is still a price difference creeping into coal power, he says, especially for the 3 to 4 percent that is traded on exchanges. For example, recently, while energy from domestic coal is being sold at 4-5 rupees/kWh ($0.05-$0.06), that goes up to 5-8 rupees/kWh ($0.05-$0.10) for energy of imported coal (and gold as high as 12 rupees/kWh or $0.15 in the spot market one day last week). Meanwhile, power from wind and solar is Rs 3 and Rs 2.5 ($0.03 and $0.04) respectively.
Importantly, Buckley adds, “50 degrees shows the infrastructure isn’t working. Coal power plants can’t operate above 50 degrees. They only break when you need them.”
Experts say it is indeed a reminder that India must invest more in its renewable energy to better secure its energy needs.
In fact, late last month, as energy companies scramble for coal to burn as demand for fans, coolers and air conditioning mounts, it was power from wind plants that came to the rescue as it comes on the grid from late April and runs through August, fading out by mid-September .
“Every unit [of electricity] says Karthik Ganesan, fellow and director in research coordination at the Council on Energy, Environment and Water, a New Delhi think tank.
India gets about 74.4 percent of its electricity from coal-fired power plants. Coal shortages are not new to the country – it faced similar scarcity last year – and are attributed more to poor planning than any other reason. For example, last year although coal was mined from the ground, it was located at the mouth of the mine and then flooded with rain with high demand in other parts of the country. Another common problem is the fact that cash-strapped state-run energy companies often do not place orders for coal in advance, leading to complaints of shortages when demand rises.
Some of these problems arise from the fact that in India, electricity is used as the political capital – for decades political parties have provided free or cheap electricity to voters. But at the end of the day, distribution companies bear the cost of this as years of unpaid bills mount, leaving them no way to invest in upgrading infrastructure or placing coal orders, among other things.
“Sooner or later, the government needs to fix the most fundamental problems in the system,” Ganesan said. “Everyone is coughing up dollars [to import coal] Because there is no other option at the moment and we literally have to spend money to solve the problem… But instead of solving the problem, we continue it by spending good money after the liquidity.”
However, the call to end coal cannot be one to stop investing in mining any coal at all. “We don’t want to transition to renewables in a destructive way putting people back 30 years…. Climate change is a reality and its impact – rising temperatures and the need for air conditioning – is also a reality,” Ganesan added.
India also needs to step up its renewable energy game, especially if it really wants to reduce its dependence on coal. As of April, it had 158.12 gigawatts of renewable capacity installed — which it plans to increase capacity up to 500 gigawatts By the end of the decade, a questionable target because it would need to add about 30 gigawatts of renewable energy annually, double what it did last year.
For now, it’s the privately run energy companies — those that have been allowed to pass higher tariffs to consumers — that are smiling their way to the bank, even after accounting for the increase in coal import costs.
For example, Tata Power will operate at full capacity the 4,000 megawatt ultra-large power plant at Mundra in Gujarat – a plant entirely based on imported coal. Similarly, Adani Power – part of the diversified Adani group, owned by Asia’s richest man, Gautam Adani – also has a 4,620 MW plant in the same area that is entirely based on imported coal. (Both companies have investments in renewable energy and the latter has announced commitments of $70 billion in them.) And although the state-run distribution companies — those that will buy electricity from these stations — are notorious for not paying on time, or even in full, companies can still be expected to see an increase in profits.
None of this makes any difference to Ismail Mohamed, who runs a welding company in the village of Hasanjang. The COVID-19 pandemic devastated his business during the first two years of the COVID-19 pandemic as many locals – who earn their livelihood by working on construction sites in major cities – had no income to pay to install metal gates and grills as India implemented multiple lockdowns. Now, the nearly 14-hour power outage has only added to the pain, especially since prices for the diesel powering his generator have also gone up.
“I can’t work,” he told Al Jazeera. “I can’t even make ends meet. What is one supposed to do?”