Increased Industrial Activity Drives Power Demand in November: Report
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New Delhi, Dec 9 (NationPress) After three months of steady growth, India's power demand is expected to rise by 4.3 percent year-on-year, reaching 125 billion units (BUs) in November. This increase is attributed to a resurgence in industrial activity and warmer weather, as outlined in a report released on Monday.
The report from CRISIL indicates that power generation is estimated to have grown by approximately 5.4 percent year-on-year to 136 BUs this November, sufficiently satisfying the monthly demand.
In a notable trend reversal, coal generation experienced a 3.5 percent year-on-year increase in November, following three months of decline.
Manufacturing activity gained momentum during the month, as evidenced by the Purchasing Managers’ Index (PMI) reading of 56.5, signaling expansion. Remarkably, industrial and commercial consumers contribute to nearly half of India's total power demand.
Furthermore, November saw the second-highest maximum temperature of 29.37 degrees Celsius and the third-highest average temperature of 23.14 degrees Celsius for the month since 1901. From April to November, power demand has risen by 4.7 percent year-on-year. Additionally, peak power demand is estimated to have slightly increased to 207 GW in November, compared to 204 GW a year earlier.
Robust economic activity, with projections indicating the nation’s gross domestic product growing by 6.8 percent year-on-year this fiscal year, is also expected to enhance demand. However, the anticipated moderate winter season (from December 2024 to February 2025), as predicted by the India Meteorological Department, may temper power demand in the fiscal year.
In November, power generation is estimated to have increased by 5.4 percent year-on-year to 136 BUs, comfortably meeting the monthly demand. A trend reversal was noted as coal generation rose by 3.5 percent on-year in November, following three months of decline. Generation from hydro, nuclear, and renewable sources increased by 43 percent, 8 percent, and 4 percent, respectively.
The rise in hydro generation can be attributed to the base effect, considering it had previously declined by 33 percent in November 2023. Coal continues to be the primary source of electricity generation in India. To maintain uninterrupted generation, coal dispatch to power plants surged by 4.3 percent year-on-year from April to November, thus boosting coal inventories. In November, dispatch rose by 2.8 percent year-on-year, with coal production increasing by 7.4 percent year-on-year post-monsoon.
As of November 30, thermal power plants had 40 million tonnes (MT) of coal, up from 27 MT during the same period last year. The situation has improved compared to last year, with power plants holding 14 days of coal stocks compared to 10 days last year. Regionally, the trends in power demand show significant variation. The northern states, accounting for 29 percent of India’s power demand as of fiscal 2024, saw a 9 percent increase this November. Meanwhile, the western region, which holds the largest share at 32 percent, only saw a 1 percent rise, while the southern and eastern regions experienced growth of less than 2 percent year-on-year. Fluctuations in weather patterns, including extreme heatwaves in the first quarter and insufficient rainfall in July in northern India, have heightened power demand. With the expectation of ongoing intense weather patterns, power demand is anticipated to remain elevated.
