September rain cooled India’s power demand for second consecutive month, Crisil says

  • Demand for electricity waned by about 0.3% last month from a year ago to an estimated 141 billion units.

Manas Pimpalkhare
Published3 Oct 2024, 07:04 PM IST
The share of coal-fired power generation declined to 65% in India in September.
The share of coal-fired power generation declined to 65% in India in September. (REUTERS)

New Delhi: Power demand declined for the second consecutive month in September after key states received above-normal rainfall, while the share of hydropower generation in India's energy basket rose, strengthening coal stockpiles, according to ratings company Crisil.

Demand for electricity waned by about 0.3% last month from a year ago to an estimated 141 billion units (BU) although it increased 5.4% for the April-September period, Crisil said. It noted that 20 key states and Union Territories, which together account for 75% of the power demand pie, received 37% above-normal rainfall in September.

India's power demand contracted in August for the first time in at least 15 months, according to data from the Central Electricity Authority, Crisil's report showed. September's power demand decline, however, was slower than the 5.3% on-year drop in August, it added.

Also Read | India to add 7 new nuclear reactors, increase power generation capacity by 70% in 5 years: Minister

Peak power demand is likely to have declined to 230 GW in September compared with 243 GW a year ago, which was the annual peak. The monsoon's cooling effect, however, was inadequate for the country's peak power demand, Crisil indicated.

"… the peak power demand for September this year is estimated to have been higher than the 217 GW demand a month ago. This can be attributed to the lower rainfall in September compared with August, resulting in higher cooling requirement," Crisil said in the report.

Hydro generation

Excess rainfall over India's western and northern regions in September led to a decrease in power demand by 4% and 2%, respectively, from a year earlier, Crisil said. Lacklustre rainfall over India's south led to a 4% rise in on-year demand in the region, it said.

"The same story plays out on a state level as well. Power demand is estimated to have declined ~6% on-year in Rajasthan as the state received 121 mm of rainfall vis-a-vis the normal 63.5 mm in September. Conversely, Punjab received 42.4 mm of rainfall compared with the normal 77.7 mm, resulting in an estimated 8% on-year growth in power demand," Crisil said.

Also Read | Amid snail-paced monsoon, hydro power generation likely to stay weak

To satisfy consumer demand during September, hydropower generation surged as much as 40% from last year, Crisil said, adding that the rise could be attributed to a low base effect. Hydropower generation declined 26% in September 2023, the report said.

The steep jump in September this year, however, aided in increasing the share of hydropower generation in India's energy mix.

"... the share of hydro generation jumped to 15% in September from 11% in the corresponding month last year, whereas the share of coal power declined to 65% from 69%," Crisil said. “Power generation is estimated to have increased ~2% on-year to ~152 BUs this September, more than meeting monthly demand,” Crisil added.

Coal still remains the key source of energy in India, Crisil noted. Cooler temperatures brought about by the monsoon this year compared to hotter months last year due to El Niño led to a surge in coal stockpiles in the country, according to the report.

El Niño is a weather pattern in the Pacific Ocean that is said to cause weak monsoons and lower rainfall in India.

Also Read | India’s peak demand hits 235 GW, power generation up 10% in April

"As on September 29, thermal power plants had 37 million tonnes (MT) of coal as against 25 MT during the same period last year," the report said.

The absence of El Niño this year along with higher overall rainfall has led to an improvement in coal stockpiles, "as indicated by 13 days of stocks at power plants as of September 29, 2024, compared with 8 days last year," Crisil noted.

Crisil projected India's power demand will rise 6.5-7.5% this year following prolonged heatwaves in April and May as well as inadequate rainfall in June.

The rise in demand will be in tandem with the country's economic growth, Crisil said, adding that robust economic activity propelling the country's gross domestic product to a 6.8% expansion year-on-year would also lead to a boost in power demand.

 

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First Published:3 Oct 2024, 07:04 PM IST
Business NewsIndustrySeptember rain cooled India’s power demand for second consecutive month, Crisil says

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