India’s power demand is estimated to have risen by 7% to 150 billion units (BU) in July from the corresponding period of last fiscal owing to higher consumption in rain-deficient northern states. In June, the power demand rose by 8.6% from last year. The demand for power during the first four months of the current fiscal 2024-25 also registered an increase of 10% over the year ago period, CRISIL said.
However, power demand in other regions moderated in July as the monsoon coverage helped in lowering the temperatures. Data compiled by CRISIL showed that power demand in the southern region rose by 4% while it declined a marginal 1% in the western region. The sharp rise in demand in the northern region was primarily because of lower rainfall in Punjab, Haryana and Rajasthan, it said.
Rainfall in Maharashtra and Gujarat was 63% and 45% higher than normal respectively last month. In contrast, Punjab and Haryana received deficient rainfall of 44% and 41%, respectively, which is likely to have led to higher power demand for irrigation as these are key agriculture states, as per the report.
As the demand grew, power generation has also been estimated to have increased by 5% on-year to 156 BUs this July, more than sufficiently making up for the increase in demand.
“Excluding hydro power; coal, nuclear and renewable energy generation increased during the
month by 4%,17% and 12% on-year, respectively,” the report said. Hydro power generation is estimated to have declined 6% on-year as per provisional data reported by Grid India because of deficient rainfall in the northern region. As per data from the Central Water Commission, water level in 10 reservoirs in the region was only 33% of total capacity as on August 1 compared to 76% last year.
Moreover, the coal supply to power stations has improved this fiscal with dispatches surging 6.7% on year in the first quarter of 2024-25. As on July 31, coal stocks at thermal power plants stood at 46 million tonnes sufficient to last 15 days as against 36 MT estimated to last 13 days during the same period last year.
CRISIL projects power demand to rise 6.5-7.5% on-year in fiscal 2025, owing to vagaries in the weather, including severe and prolonged heat waves that occurred in the first quarter of fiscal 2025, as well as insufficient rainfall in July in northern India.
“Also, supporting demand is coming from strong economic activity, with estimates pointing to the country’s gross domestic product expanding between 6.8% on-year,” the report said.