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Droughts and Blackouts: How Water Shortages Cost India Enough Energy to Power Sri Lanka

India is making great strides to aggressively expand its renewable energy capacity. But the country's power sector remains highly reliant on thermoelectric plants, with high demand for water for cooling. That means that droughts, like the one caused last year by weak monsoons, can shut off the power, hampering the economy and potentially endangering lives.

To understand the impact and extent of these shutdowns in the thermal power sector, we compiled and analyzed over 1,400 Daily Outage Reports filed with India's Central Electricity Authority between 2013 and 2016. We found that water shortage related shutdowns in 2016 cost India roughly 14 terawatt-hours (TWh) of thermal electricity generation, enough to power India's neighbor Sri Lanka for an entire year.

Terawatt-hours Lost Due to Water Shortages

Our analysis found that, in 2016, 18 thermal power plants in India had shutdowns caused by water shortages, ranging from days to months. Had these 18 plants had access to water during the shutdowns, they would have generated 14 TWh of electricity, about one percent of India's annual consumption. During the 4 years from 2013 through 2016, India's thermal power sector lost more than 30 TWh of potential electricity due to water shortages.

The real effect was compounded by the fact that most of these shutdown incidents happened from March through September. In these months—if the monsoon is weak or delayed, as it was in 2016— most of India is dry and hot, and the demand for electricity is high. Besides what's needed for industry and domestic purposes, electricity is also needed to irrigate agriculture. In other words, electricity generation was the most hampered when people needed it the most.

The 18 plants were affected in different ways. Some lost a large share of capacity for a short period. Others lost a small share of capacity for a long period.

Shutdowns Can Last Hundreds of Days

The Parli Thermal Power Station in Maharashtra with a capacity of 1380 MW experienced the worst of both worlds, losing a very large share of capaicity for a very long time. This coal-fired power plant was entirely shut down for 89 days in 2016. In addition, it was largely paralyzed for 196 days, which cost Parli about eight gigawatt-hours in potential electricity generation, and a potential $455 million in lost revenue, based on its Rate of Sale of Power disclosed by CEA. Maharashtra State Power Generation Co. Ltd., who owns Parli and a few other plants, reported FY16 revenue from sales of power of 192.9 billion Rupees (about $3.1 billion), so the lost generation represented a substantial percentage of total revenues.

Parli has a long history of having to shut down because of its inadequate water supply. Between 2013 and 2016, the plant only generated an average of 38 percent of its capacity. During this time period, it was shut down entirely for 506 days purely because of water shortages.

Vulnerability to Drought Another Reason to Shift From Thermal

India's main modes of energy generation – thermal power plants and hydroelectric plants—are both threatened by water availability. This analysis shows that scarce water resources are posing a real financial threat to India's thermal power sector and its investors, as well as risks to India's electricity generation. Competitions over water and water-induced power outages have the potential to create social tensions between power producers, governments and consumers.

Climate change is likely to increase the frequency and intensity of droughts, and socio-economic development will intensify local water competition. In the coming decades, we expect more water shortage-induced power shutdowns, unless steps are taken to reduce these risks.

Existing thermal power plants could reduce water risk by adopting less water-dependent cooling technologies, such as dry cooling. Companies, governments, and communities would all benefit from the advancing the government's push for more renewable energy, since solar PV and wind do not require water for cooling and are much less vulnerable to droughts. In fact, solar and wind energy at their highest levels of production during the dry, hot summer months – at the same time that thermal plants are most at-risk.

To further assess thermal power plants' vulnerability to droughts and water scarcity in India, detailed plant level water withdrawal and consumption data are needed. WRI is developing a methodology to estimate water withdrawal and consumption for thermal power plants using satellite imagery for data scarce regions. We are testing this methodology in India to develop a water usage database for the country's thermal power plants, and provide a comprehensive risk assessment capacity that can support better planning for India's water-stressed power sector. As demand for energy grows and climate change impacts water amounts and timing, this kind of analysis will become vital for all countries.

This post is the first episode of WRI's blog series, India's Water-Energy Nexus. This series maps the impacts of growing water stress on India's thermal power utilities, and explores the implications of water usage, as well as opportunities in water savings from renewable energy, for the future of India's power sector.

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