India, China Ramp Up Coal Use as Hydropower Production Drops

A drop in hydro-generated power in China and India has caused the two largest polluters in Asia to turn back to fossil fuels to generate electricity. According to energy think tank Ember, hydropower generation in Asia dropped by nearly 18% in the first seven months of the year while fossil fuel-generated electricity increased by 4.5%.

This represents the fastest reduction in hydropower generation in the region in decades and has forced China and India to go elsewhere to supply their massive energy needs. Increased electricity demand coupled with dwindling output from hydropower plants has resulted in a spike in the use of fossil fuels such as coal and oil to generate electricity in both China and India.

Rystad Energy’s director of power and gas markets Carlos Torres Diaz said that although solar and wind power generation in Asia has expanded in recent years, a “large decline” in hydropower output increased the supply of electricity from fossil-fuel-fired power plants. Diaz noted that continued and intense heat waves in Asia depleted water reservoirs and forced countries to use alternative means to meet their energy needs.

A record-breaking drought in China dried some of the country’s rivers up and impacted hydropower production, prevented shipping via the water, and even forced some large companies to temporarily pause their operations. Erratic and often extreme weather in the region is also making electricity demand more volatile and making it harder for power regulators to plan efficient energy distribution.

The National Bureau of Statistics shows that hydropower output in China dropped by 15.9% in the first eight months of the year, the fastest fall in the country since the late 1980s. India saw its hydroelectricity generation decline by 6.2% within the same period, reducing hydropower’s total share in the nation’s electricity grid to 9.2%, the lowest level in close to 20 years.

Chinese utilities covered this energy shortfall by increasing fossil-fired energy generation by 6.1% from January to August while India raised fossil fuel power electricity output by 12.4%. The data also shows that renewable energy output in China and India during the same period went up by 22% and 18% respectively.

With both nations being Asia’s largest polluters and ranking in the top three largest global polluters alongside the United States, their return to fossil-fuel-generated electricity is a major blow to global climate change efforts.

Vietnam has also filled a power shortfall caused by dry weather and reduced hydropower output with a more than 10% increase in coal-generated electricity.

From the increased demand for coal and other fossil fuels, it can be seen that extraction companies such as Warrior Met Coal Inc. (NYSE: HCC) play a pivotal role in making sure that the energy needs of different countries are met in a seamless manner.

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