India's power crisis and what it means for your bills

India's power crisis and what it means for your bills

India is currently undergoing a second power crisis since October 2021 due to the dwindling supply of coal

There is no hiding the fact that our bills are increasing on a monthly basis owing to the population spurt, global tensions, and most importantly, inflation. The situation is not stable currently and our electricity bills might increase further. Here's why:

Dwindling supply, spiralling demand

India is currently undergoing a second power crisis since October 2021 due to the dwindling supply of coal which is the primary source of electricity generation (thermal power plants). Coal reserves are critically low in 12 states.

This is compounded by the heatwaves across the country. Moreover, the increasing demand of electrical devices has raised the need for more electricity generation.

The post-COVID wave economic activity revival and higher household incomes mean that people are buying not just more digital devices but also investing in EVs that in-turn need more electricity to run.

To put things in perspective, the domestic power demand in the first half of April was at a 38-year high. With coal stocks drying up and import costs spiralling out of control due to geo-political tensions in Europe, the power crisis has deepened.

India has 173 thermal power plants out of which 105 are facing a critical coal situation. The current coal stock is less than 25% of what it should be.

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Result of all the factors hampering power generation

The result of all the above factors is leading to power cuts and prolonged blackouts across the country with many small towns and villages remaining without electricity for most parts of the day.

Moreover, the economic activities take a hit as the power to run industries as well as small units is not available, hampering the production and supply chains.

Furthermore, the continuation of this will lead to the price of daily commodities like milk, pulses and vegetable going up, ultimately pinching the common citizen's wallet.

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