Model Question and Answers for APSC | Discuss factors responsible for current power crisis in India.

Ans: India was hit by a power crisis in late April 2022. In October 2021, India experienced a similar crisis induced by coal shortages. Monsoon-induced coal shortages and power crises are annual events in Indian electricity. However, an early summer power shortage, as seen this time, is unprecedented.

The current crisis can be explained by three interlinked factors: A demand surge, supply disruptions and dysfunctional cash flow.

1. First, the heatwave and revival of economic activities after Covid-19 disruptions propelled electricity demand.
2. Second, the TPPs’ inability to ramp up power generation is explained by critical coal stockpile levels at plant sites. CIL has enough to fuel the TPPs for three weeks. However, the coal didn’t reach plants on time, partly due to a shortage in railway
3. Inflation in imported coal prices also had some impact. Power production from 17GW TPPs, which run only on imported coal, has slowed down.
4. The third factor is a cash flow problem in the electricity The inability of discoms to recover costs has resulted in outstanding dues of over ₹1 lakh crore to power generation companies. Consequently, gencos default on payments to CIL.

Multiple structural fault lines:

1. First, the chronic insolvency of discoms has disrupted upstream supply chains. This has been a longstanding policy priority but fixing this through prepayment, cost recovery and bailouts is It creates no incentives to plan fuel reserves for a sudden demand surge.
2. Second, utilities do not undertake effective resource planning that allows them to keep everyone’s lights on. Instead, given legacy shortages, political and economic expediencies have historically determined whose lights stay on.
3. Finally, periodic power shortages and their management have been opportunities to leverage political
4. With every crisis, states blame the Centre for faulty coal allocation and dispatch, and the Centre blames states’ inability to pay upstream The result is band-aid solutions to suppress the crisis rather than fixing structural fault lines.

The shortages testify that coal dependency is neither predictable nor cheap. A strategic approach to the energy transition that harnesses the low-cost power promise of renewable energy and opportunities for diversification in the energy mix is critical in addressing persisting power shortages.