India Sees Power Use Surging to Record, Adding to Energy Crisis

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(Bloomberg) — India expects a surge in peak power demand to a record during the hot season, according to people familiar with the matter, potentially adding to energy woes the country is already facing because of the war in Iran.

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The ministry is in talks with coal miners and the railway department to ensure there’s enough fuel at power stations from April, the people said, asking not to be named as they’re not authorized to speak to the press. Use could top out at 283 gigawatts during the most extreme periods, a 13% jump compared to the current record of 250 gigawatts set in the summer of 2024.

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The war in the Middle East, now in its third week, has roiled energy markets, cutting off flows of crude and liquefied natural gas to the world and driving up prices. India is a major importer of LNG and other products from the region, and disruptions have already started to hit various industries, from hotels and restaurants to fertilizer makers and oil refiners.

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A potential jump in electricity demand bodes well for power companies as well as coal miners, including Coal India Ltd., which has seen its unsold inventory rising to a record this year. The ministry plans to issue an advisory to all coal power plants to defer any maintenance shutdowns planned for the summer, according to the people. It could also invoke emergency rules to switch idle power stations back on.

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The power ministry didn’t immediately respond to an emailed request for comment.

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The country has enough generation during daytime to meet the surge in demand, according to the people. The evening, when nearly 140 gigawatts of solar capacity is idle, can be trickier. That could be compounded by disrupted supplies of liquefied natural gas, putting more pressure on coal power plants.

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India’s summer starts in April, but in recent years the nation has seen temperatures rising from March. There’s an increased likelihood of more heatwave days across many parts of the country in the three months to May 31, the India Meteorological Department said earlier this month.

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Energy shortages caused by the war in Iran could add further pressure if they were to persist. Disrupted supplies of LNG, which helps run gas power plants that help meet the evening load, put the onus on coal to satisfy demand. 

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Fuel disruptions have complicated power demand assessment as well. A shortage of LPG, the fuel of choice in more than 330 million Indian kitchens, is causing a shift to electric cook stoves. The power ministry has adjusted its estimates for any potential rise in power usage for cooking, one of the people said.  

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