Power demand in India shrinks in March thanks to unexpected rains: CRISIL

The fall in demand also led to a fall in power generation by 7 per cent YoY in March as compared to the same month last year

Due to unprecedented rainfall, demand for power in India fell 1.3 per cent in March, rating agency CRISIL said on Tuesday. This fall in demand also led to a fall in power generation by 7 per cent year-on-year (YoY) in the month.

According to the Indian Meteorological Department (IMD), India received 37.6 mm of rainfall in March, the highest it received in the last three years. In March 2021, India received 16.7 mm of rainfall and in March 2022, 44.7 mm.

The peak demand during March was, however, 3 per cent higher at 209 GW compared to 202 in March 2022.

March also saw a fall in prices of power by 33 per cent YoY in March. But, in January and February, there was a sharp uptick in the prices owing to the cold wave.

"The fourth quarter in fiscal 2023 saw a 13 per cent growth in the day-ahead market (DAM) prices over the same period a year ago," CRISIL said in a release.

The lower power generation eased the pressure on India's hydro and thermal power generation.

"Hydro generation dipped 27 per cent in March 2023, and its share in overall generation decreased 167 basis points (bps), which prevented the water levels in hydro plants from decreasing further," it said.

However, the quarterly numbers remained elevated due to higher demand in January and February.

Q4FY23 saw a 7 per cent YoY rise in power demand mainly due to a jump of 13.7 per cent and 10 per cent in January and February, respectively, owing to the higher heating requirement in winter months and robust economic activity.

Increased winter demand also led to 13 per cent and 9 per cent higher generation across fuels in January and February, respectively.

In the current quarter, ending June 2023, the power demand is expected to grow 4 per cent.

"Soaring temperature and resilient economic activity are expected to keep power demand growing," CRISIL said.

"In FY24, given predictions of heat waves that will increase usage of air conditioners, fans, and refrigeration units, peak electricity demand should touch a record high. India's peak power demand is expected to grow to 230 GW in the first quarter of fiscal 2024, rising 6.5 per cent YoY," it added.