Peak power demand declines in Sept; renewable energy generation increases

While coal and gas-based power generation experienced reductions of 5% and 15%, respectively, hydro, nuclear, and renewable energy sources saw a rise

The peak power demand in September fell to 230 GW, down from the 243 GW recorded during the same month last year, which had marked the annual high for that fiscal year.

This figure is also below the 260 GW projected by the Ministry of Power, according to a report from The Financial Express. While the long-period average of rainfall for August stands at 254.9 mm, it dropped to 167.9 mm in September.

Fluctuations in power generation
 

India’s power demand saw a slight decline in September for the second consecutive month, reaching approximately 141 billion units (BUs), a 0.3 per cent reduction from the same period last year. Despite this, power generation grew by nearly 2 per cent year-on-year, estimated at 152 BUs in September, more than fulfilling the country’s requirements.

 

While coal and gas-based power generation experienced reductions of 5 per cent and 15 per cent, respectively, hydro, nuclear, and renewable energy sources saw a rise. Hydro generation increased by 40 per cent, nuclear by 9 per cent, and renewable energy by 7 per cent, compared to last year. This surge in hydroelectricity is partly due to the low base effect, as hydro generation had dropped by 26 per cent in September 2023. As a result, hydro’s contribution to the energy mix rose to 15 per cent in September, up from 11 per cent the previous year, while coal’s share decreased to 65 per cent from 69 per cent.

Coal stock and supply outlook
 

Despite the growth in renewable energy, coal remains the dominant power source. Coal dispatches to power plants increased by 3 per cent during July and August, leading to higher stockpiles. As of September 29, thermal power plants had 37 million tonnes (MT) of coal, compared to 25 MT during the same period last year.

In contrast to 2023, when El Niño-driven higher temperatures and lower rainfall led to a 17 per cent surge in coal-based generation, the current year has seen an improvement in coal stocks. By September 29, 2024, power plants had 13 days’ worth of coal, up from eight days the previous year. To mitigate any supply disruptions during the monsoon, the government has extended the blending of imported coal with domestic supplies until October 15, while reducing the blending ratio from 6 per cent to 4 per cent.

CRISIL Ratings predicts that power demand will rise by 6.5-7.5 per cent in fiscal year 2024-25 due to extreme weather conditions, including heatwaves and insufficient rainfall. Additionally, strong economic activity, with the nation’s GDP expected to grow by 6.8 per cent this fiscal year, is also fuelling electricity demand.