India's power demand surge may require national electricity plan revision

India faces unprecedented surge in power demand with its peak expected to reach 260 GW by September or October this year

India's power sector is experiencing a significant surge in demand, with projections indicating that peak power consumption could reach an unprecedented 260 gigawatts (GW) during September or October this year. This marks a 20 per cent increase in just two years, necessitating potential revisions to the National Electricity Plan (NEP) 2022-27, revealed Power Secretary Pankaj Agarwal, according to a report by the Financial Express.

Agarwal said that the current NEP might need updating to address the new demand forecasts, with the government now anticipating the country's peak power demand to hit 400 GW by 2031-32, exceeding the previously projected 384 GW.

 

June 2024 saw power consumption rise to 152.4 billion units (BU), up 9 per cent compared to 140.27 BU in June 2023

In May, India's peak demand already reached 250 GW, surpassing last year’s peak of 243 GW recorded in September 2023. This rapid increase is attributed to rising per capita consumption, which has been growing at an average rate of almost 7 per cent over the past five years, from 184 GW in 2019-20.

Extreme heat and humidity driving power consumption

Several factors contribute to this soaring demand. The use of air conditioners and cooling appliances has surged due to extreme heat and humidity, particularly with the arrival of monsoon rains. Experts, speaking to news agency PTI, predict that high humidity will continue to drive steady power consumption as cooling appliances remain essential.

Government response to rising power consumption

To meet this growing demand, the government has implemented various measures:
 

1. New thermal units: Upcoming new units of thermal plants are being commissioned to bolster capacity. However, the timely completion of these projects is crucial.

2. Blending imported coal: The extension of blending imported coal at domestic coal-based plants at 4 per cent until October 15.

3. Section 11 extension: Extension of Section 11 of the Electricity Act, 2003, until September, which mandates all imported coal-based power plants to operate at full capacity.

4. Increased coal production: The coal ministry has increased coal production to ensure adequate supply for thermal power plants.

Agarwal stressed the importance of improving the financial viability of distribution companies (discoms), which are currently grappling with over Rs 6.5 trillion in accumulated losses as of March 2023. Annual and cash losses stand at approximately Rs 67,000 crore. Enhancing the integration of renewable energy sources is also critical to meeting future demand projections. The NEP outlines a total installed power capacity of 900 GW by 2031-32 to meet the anticipated demand.