Power consumption in India is likely to peak this month, with power demand expected to grow 4-6 per cent year-on-year to 142-144 billion units (BU), Crisil Research said on Monday.
During May 2022, India consumed 136 BU of electricity, a year-on-year increase of 23 per cent. National peak demand stood at over 204 gigawatts (GW), up 21 per cent year-on-year.
“With power consumption expected to peak in May, Crisil Research expects it to touch 142-144 BU with demand accounting for 76-78 per cent of the total coal demand during the month. Thermal power plants will need 77-79 million tonnes of coal to meet peak demand. We expect the domestic supply of coal to be 68-70 million tonnes, most of which will come from Coal India (CIL).
energy demand
Proactive efforts of the central government and rains in April 2023 have ensured that coal availability will be sufficient to meet the impending increase in power demand this summer amid the forecast of heat waves. Power demand fell 1.1 per cent to 133 BU in April as unseasonal rains in parts of the country increased coal stocks.
According to the India Meteorological Department (IMD), the monthly maximum temperature for May 2023 is expected to be above normal over east-central and east India and over parts of northeast and peninsular India. However, it is very likely to remain below normal over northwest and west-central India.
Normal to below normal minimum temperatures are expected over most parts of the country except parts of northwest and east India, where some areas are likely to have above normal minimum temperatures.
adequate supply
Crisil Research said coal stocks at power plants stood at 13 days at the end of April 2023, while the number of plants with significant levels of stock came down to 41 in April this year.
Coal production to increase by 12.03 per cent to a record high of 107.8 million tonnes in March 2023 and 8.85 per cent to 73.14 million tonnes in April 2023.
Total dispatch of coal to end users increased by 11.6 per cent to 80.35 million tonnes in April 2023. The dispatch to power plants increased by 6.6 per cent to 65.41 million tonnes during the same period. Thermal power plants have enough buffers this time around with increased domestic supply and orders to blend 6 per cent of requirement with imported coal in the first half of FY2024.
As of 7 May, India’s cumulative coal stockpiles at power plants stood at about 35.8 million tonnes, enough to meet the country’s demand for more than 12 days based on daily consumption.
The softening of prices in the short term also shows relief in the market. Prices in the day-ahead and real-time markets (which account for about 86 percent of the total exchange market) fell 46 percent and 48 percent, respectively, in April.