EIGHT-HOUR BLACKOUTS HIT INDIA AS SUPPLY ISSUES, WEATHER PORTEND CRISIS

NEW DELHI: An already sweltering summer and acute coal shortages are triggering blackouts across parts of India, raising fears of a new power crisis that could roil Asia’s third-biggest economy.

A surge in demand for electricity has prompted states including Punjab and Uttar Pradesh in the north and Andhra Pradesh in the south to cut off supply. The disruption, as long as eight hours in some places, is forcing customers to either endure the heat or look for costlier back-up options.

Although outages aren’t uncommon in India, the situation this year particularly points to a “looming power crisis,” said Shailendra Dubey, chairman of All India Power Engineers Federation, an advocacy group.

The blackouts sparked by the scarcity of coal -- the fossil fuel that accounts for 70% of India’s electricity generation -- are threatening to hobble the $2.7 trillion economy that’s looking to fire up all its engines after emerging from a record contraction caused by the pandemic. They are also fanning inflation at a time when policy makers are struggling to rein in runaway energy prices fueled by Russia’s war in Ukraine.

Small and large businesses alike, including producers of metals, alloys and cement, are having to spend more on energy in a tight domestic and global market. A persistent shortage of coal could weigh on the country’s industrial output and become another “stagflationary shock,” according to Nomura Holdings Inc.

“Both demand- and supply-side factors are responsible,” economists led by Sonal Varma at the Japanese bank wrote in a research note on April 19. “Electricity demand has shot up, due to the reopening and as the country heads towards the peak summer season, but supply has been disrupted due to the reduced availability of railway rakes to transport coal and lower coal imports.”

“Thermal plants across the country are grappling with coal shortage as the power demand in states has increased,” All India Power Engineers Federation’s Dubey said in a statement Wednesday.