Blackouts hit Indian factories as coal crunch feeds into economy

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Indian factories, smelters and households are being hit by blackouts and rising energy costs as the impact of plunging coal stockpiles at the country's power stations ripples through the economy.

The weakest monsoon since 2015 has curbed hydropower output, while hotter-than-normal weather has buoyed demand for air conditioning and farm irrigation. That's seen coal-fired power stations, which supply about two-thirds of India's electricity, rapidly burn through their inventories.

Smaller factories, farmers and households are facing power cuts as demand outweighs supply on the grid. Meanwhile, large industrial customers - in metals smelting, chemicals and paper — can't get enough fuel to produce electricity themselves due to State-owned miner Coal India prioritizing deliveries to grid-connected generators.

Small steel mills in the central state of Chhattisgarh are facing outages of 10 to 12 hours a day, forcing plants to reduce output, said Manish Dhuppad, general secretary at the Chhattisgarh Mini Steel Plant Association.

Mills require an "uninterrupted supply of power," he said. "Say we have hot metal inside the furnace and just before we are able to take it out, the power supply goes. By the time it comes back, the material has solidified and we need to melt it again."

The power shortage highlights the increasing role that extreme weather is having on India's economy, with the weak monsoon driven by a record El Niño. It also shows how the country's continued reliance on fossil fuels is limiting its ability to respond to a changing climate.

Feedstock supplies at almost half of India's coal-fired plants had fallen to less than a quarter of required levels as of Oct. 10, according to the power ministry. A late burst of monsoon rainfall last month in coal-mining regions in the east of the country exacerbated the shortages, crimping production and also hampering rail transport of the fuel.

In the northern state of Punjab, homes and industries are enduring lengthy blackouts.

Badish Jindal, who runs a steel wire plant in Ludhiana, an industrial city in the state, said frequent power cuts of three to four hours had resulted in higher energy costs, as his factory needed to shift to expensive back-up generators.

"The power cu