A power scramble ahead of the general election

Power distribution companies typically stitch up short-term electricity supplies ahead of summers through the power ministry’s Deep platform and other power exchanges. (Reuters)
Power distribution companies typically stitch up short-term electricity supplies ahead of summers through the power ministry’s Deep platform and other power exchanges. (Reuters)

Summary

Electricity distribution companies are rushing to ensure their customers have uninterrupted power supply as election season heats up

NEW DELHI : Power distribution companies across the country are scrambling to procure more electricity than they usually do for the summers, with hotter-than-normal temperatures expected until May, coinciding with the national election.

Summers are notorious for interruptions in electricity supply as more people keep their fans and air conditioners running longer. To keep up with the increased demand, power distribution companies, or discoms, typically stitch up short-term electricity supplies in advance through the power ministry’s Deep platform and other power exchanges.

This year, apart from a summer that’s predicted to be particularly warm, there’s will be additional stress on discoms because of the general election as state governments seek to ensure uninterrupted power supply in the run up to the national election. Authorities do not want voters disgruntled because of power cuts.

The national election is expected to be held in April-May. The India Meteorological Department on Friday forecast that maximum temperatures would be above normal in most parts of the country until May.

“Usually, discoms are directed by state governments to ensure uninterrupted power supply during and ahead of elections. The Centre also tries to ensure that there is adequate availability of power," said an official with a power generation company on condition of anonymity.

“Since both rains and wind were deficient during April-May (last year)... leading to lower supply from hydro and wind power plants, governments will be more cautious this time around in terms of ensuring adequate power is tied up in advance," this official said.

Electricity demand soared to a record high last year because of heat waves, stretching discoms and power grids to their limits. This year, too, the scramble for power is evident.

The Uttar Pradesh Power Corp. Ltd has tied up with power generation companies for procuring 7.14 GW of electricity from April to September at 9.68-12 per unit, as per the Deep platform. (Deep stands for discovery of efficient electricity price).

The Assam Power Distribution Co. Ltd has tendered for 5.6 GW of electricity supplies from April to November, of which it has so far only managed 1.05 GW of power at 9.9 per unit.

The Bihar State Power Holding Co. Ltd has arranged for 3 GW of electricity supplies for 7.45-9.95 per unit for the period from 20 March to 30 September, and the Kerala State Electricity Board for 1.2 GW at 9.59-14.3 per unit for April to June. 

“Starting March, the demand (for electricity) is expected to increase and remain elevated during the summer season. The peak demand in the upcoming fiscal year (FY25) is expected to surpass the record hit this year (FY24)," said Vikram V., vice president and co-group head, corporate ratings, Icra.

According to the Central Electricity Authority, peak demand for electricity in FY25 is expected to hit 256 GW, exceeding last year’s 239.9 GW.

Demand for power has been rising the past few years amid a sharp economic recovery post the covid years. To top that, India suffered a crisis in 2021 and 2022 amid low availability of domestic coal for power plants, forcing the government to push for higher imports and blending of imported coal.

CEA data show that coal stock at power plants as of Wednesday was at 44.43 million tonnes, which is adequate for about 16 days.

Currently, domestic coal-based power generation companies have been mandated to blend 6% imported coal till March. The mandate was initially imposed in February last year until September. It was, however, extended because of increasing power demand.

Power plants dependent on imported coal have been asked to operate at full capacity till June. 

Demand for electricity has been higher than usual during this winter as well, with cold spells stretching beyond normal in some states. Peak power demand in December was 213.62 GW, 3.6% higher than a year earlier.

Last year, the Union government introduced a high-demand-period scheme to harness gas-based power generation to meet increased demand for electricity during summers. 

On Friday, Torrent Power Ltd, which distributes power in Gujarat, Maharashtra and other states, said it had received a letter of award from NTPC Vidyut Vyapar Nigam Ltd for the supply of electricity from 16 March to 30 June.

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