Electricity consumption (demand) in the country will grow at 7.1% (CAGR) between FY17 and FY22 and then slow to 6% in the subsequent five years, according to the Central Electricity Authority (CEA).
Electricity consumption (demand) in the country will grow at 7.1% (CAGR) between FY17 and FY22 and then slow to 6% in the subsequent five years, according to the Central Electricity Authority (CEA). Demand for electricity had grown at a much lower pace than projected by the CEA in the last five years — with industrial production growth tepid, peak demand grew just 4% in 2016-17 to close to160 GW against the CEA’s estimate of 9.3% growth. In the 19th electric power survey unveiled by the CEA recently, it also said aggregate technical and commercial (AT&C) losses will come down to 13% by FY22, on the back of government programmes likes the Ujwal Discom Assurance Yojana, Deen Dayal Upadhyay Grameen Jyoti Yojana and the Integrated Power Development Scheme. The AT&C losses at a pan-India level are around 20% now.
Significantly, the CEA’s latest survey projects that the industrial sector will lose its relative share in power consumption in the next 10 years, while the domestic sector will increase its share, to become the largest consumer segment (see chart). The CEA also noted that with improvement in grid supply, industries may shift to the grid from captive power plants. However, since electricity tariffs are higher for industrial and commercial consumers, it might be cheaper for them to take power from their own captive power plants, the report added. The report said that CAGR of energy consumed from captive power plants for self-use by industries would fall from 8.7% in FY15 to 8% in FY22 and 7.5% in FY27. The National Tariff Policy, 2016, underlines that as captive generation is important to assure availability of competitive power, the concerned regulators should create an enabling environment that encourages captive power plants to be connected to the grid.
Electrical energy requirement in the next 10 years is expected to grow by 79%. The country will need 1,743 billion units (BU) of energy in the FY27. Energy requirement in FY17 was close to 1,142 BU. The report noted that energy efficiency schemes and aggressive demand side management would lead to savings of 206 BU in FY22 and 273 BU in FY27.