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Business News/ Industry / Energy/  Electricity consumption vulnerable to weather patterns, strategic planning crucial: Report
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Electricity consumption vulnerable to weather patterns, strategic planning crucial: Report

To address long-term climate change concerns while ensuring energy security, the government has been emphasizing renewable energy sources.

Coal power will continue to play a significant role in the energy mix, accounting for about a third of the total installed capacity and over half of the expected generation mix by FY30. (Photo: Mint)Premium
Coal power will continue to play a significant role in the energy mix, accounting for about a third of the total installed capacity and over half of the expected generation mix by FY30. (Photo: Mint)

New Delhi: Electricity consumption in India has become increasingly dependent on weather patterns, which have the potential to disrupt power supply, according to a recent report.

An SBICAPS report on the Power Sector - “Balancing green goals and energy security through reforms" - has highlighted the need for strategic planning and proactive measures to address challenges posed by changing weather conditions.

The first quarter of the financial year 2023-24 (Q1FY24) witnessed an impact on power supply due to aberrant weather patterns. Unseasonal rainfall in some parts of the country resulted in tepid year-on-year increases in power supply during April and May. However, June experienced a significant surge in power supply as weak showers and heatwaves in the first three weeks of the month pushed up peak demand to a new high.

Subsequent improvement in monsoon coverage cooled the power demand. But southern peninsular regions saw demand spikes, while northern and western regions experienced declines. Such unpredictable weather patterns are expected to continue, with the World Meteorological Organization (WMO) warning of a nearly 90% chance of El Nino, although the benchmark ENSO Index remains within the safe zone.

These observations underscore two key trends: the increasing impact of climate change on extreme weather events such as heatwaves and precipitation, and the critical role of weather patterns in determining power supply.

As uncertainties surrounding weather patterns and climate change persist, adequate preparation becomes crucial. The report emphasizes the importance of proactive measures and strategic planning to mitigate the effects of extreme weather events on electricity consumption and supply.

To address long-term climate change concerns while ensuring energy security, the government has been emphasizing renewable energy sources. The National Electricity Plan (NEP) projects a compounded annual growth rate (CAGR) of 7% in energy demand from FY22 to FY27. To achieve sustainable growth, the revised energy mix places greater reliance on solar energy.

The report estimates that the pace of solar installations will need to double to over 30 GW per year to meet the NEP targets. Accordingly, incentives for storage solutions have been enhanced.

Coal power will continue to play a significant role in the energy mix, accounting for about a third of the total installed capacity and over half of the expected generation mix by FY30. Consequently, effective resource management plans involving coal power are vital for ensuring energy security. Short-term measures, including extending the timeframe for mandatory blending of imported coal and implementing a monsoon management plan to ensure coal supply during lean production months, have been implemented by the government.

Structural reforms are also crucial to meet energy needs. A ten-year resource adequacy plan has been proposed, and efficient power markets are deemed imperative to achieve short- and medium-term energy goals. The concept of market coupling, which aligns market prices in a given zone at a given time, has been introduced. However, concerns have been raised regarding the potential reduction of the role of exchanges and impeded price discovery.

The report suggests implementing a time-of-day tariff system to address variations in electricity demand throughout the day, particularly as the share of solar power increases.

According to the report, efforts to improve the financial health of distribution companies (DISCOMs) have also been undertaken. The government has allocated Rs. 660 billion to compliant states for reforms carried out in FY22 and FY23, with an additional Rs. 1.43 trillion earmarked for FY24. These measures have significantly reduced the outstanding dues of DISCOMs.

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Published: 11 Jul 2023, 05:41 PM IST
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