Government wants higher gas imports to meet peak power demand this summer

8 Dec 2022 , 11:38 AM

According to news reports, India has instructed state-run companies to raise their natural gas imports in anticipation of increased summertime energy demand in an effort to prevent a repetition of the biggest power crisis in more than six years which occurred in April.

Due to limited local supply and high international prices, natural gas’s share in India’s power generation fell from 3.3% in 2019 to just 1.5% this year. Nevertheless, the government still views it as a vital backup power source for emergency situations, particularly during the extreme summer heat when air conditioning use increases.

In April of this year, when electricity consumption exceeded expectations by more than 7% and resulted in widespread power outages, an unremitting heatwave fuelled extraordinary electricity use. In the majority of India, temperatures normally begin to rise about mid-March and continue to rise until early June.

According to two of the sources who talked to ET, the Indian government has requested that the nation’s main gas distributor, state-run GAIL (India) Ltd, enhance supplies to power plants throughout the summer.

In order to meet peak summer demand, the country’s largest power producer, NTPC Ltd., has also been instructed to have up to 2 gigawatts (GW) of gas-fired power plants, or more than half of its capacity, available to produce at full capacity if necessary.

India generates around three-quarters of its electricity from coal, with the remaining one-fifth coming from hydropower and renewable energy combined.

According to two of the individuals, India will keep importing coal to mix with domestic coal despite record growth in local production and supply because of rising power demand brought on by an uptick in economic activity and higher summer temperatures.

The amount of additional natural gas that would need to be imported has not yet been calculated by the government, but further imports might drive up costs and harm Bangladesh and Pakistan, which are neighbours that rely largely on imported gas but are also dealing with heavy debts.

As supplies of Russian pipeline gas decline, it is anticipated that next year’s global gas markets will remain tight.

According to data from independent energy think-tank Ember, Bangladesh and Pakistan have reduced their gas purchases amid a rise in international gas prices as a result of Russia’s invasion of Ukraine and have instead shifted to dirtier fuels like fuel oil and diesel to meet increased power demand this year.

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