India gears up for peak power demand in April

Market: Coal, Electricity, Natural gas
10/03/23

The Indian power ministry is stepping up preparations, with India facing a peak power demand forecast of 229GW in April with the onset of summer.

Several states already witnessed record-high temperatures in February. The India Meteorological Department has indicated that summers months are likely to be hotter, predicting heat waves between March and May.

The government has invoked an emergency rule that enables some of the biggest coal-fired power plants to operate at full capacity. It has directed power utilities to carry out maintenance for coal-fired power plants in advance to avoid any maintenance shutdown during the crunch period.

All imported coal-fired power plants are to run at full capacity from 16 March as the power ministry aims to buy 1,500MW of coal-fired electricity capacity using imported coal to meet an anticipated deficit during the peak summer month. The government earlier this year ordered utilities to import 6pc of their thermal coal requirements for blending until September.

An additional capacity of 2.92GW of newly commissioned coal-fired power plants is likely to be operational by the end of March, besides two units with a coal-fired power capacity of 110MW each at Barauni in east India's Bihar state during the crunch period, according to a government notification on 9 March. The railway ministry is to provide 418 rakes and more to different subsidiaries of state-controlled Coal India (CIL), along with captive blocks to meet the coal required at plants.

Gas-fired power generation will also meet peak demand. State-controlled utility NTPC has been instructed to generate 5GW from its gas-fired power plants during April-May, in addition to 4GW of additional gas-fired power capacity that will be added by other entities.

State-controlled gas distributor Gail has already assured the power ministry that it will supply 248mn m³ of gas during the summer months.

But some in the market see a possible power shortage because of a hotter than usual summer this year.

"There is high probability of having a shortage of approximately 5GW during the month of April 2023 in the night-time peak demand hours wherein the requirement would be 216.9GW and the effective available capacity is expected to be 211.89GW," said associate vice-president of coal commercial strategy and regulatory affairs at Jindal Group Saunak Dey.

India's power consumption was 116.7TWh in February, up by 9pc from a year earlier, according to data from the power ministry. India's power consumption was 1,375.5TWh between April 2022 and February 2023.

Mumbai-based Crisil Market Intelligence and Analytics forecasts India's power consumption rising by 5.5-6pc in the April 2022-March 2023 fiscal year from over 1,320TWh a year earlier.

Available stocks

A total a 204GW of India's coal-fired thermal power plants had 33.85mn t of coal stocks left as on 7 March, which is sufficient for 12 days, data from the Central Electricity Authority showed.

To meet the rising summer demand, domestic coal requirements for April-June are expected to be 222mn t against anticipated supplies of 204.5mn t, Dey said, adding that the 6pc blending mandate will cover up the shortfall. But he also said that an approximate 1GW of coal-fired thermal generation capacity may also be forced to shut down in April.

A sharp rise in electricity consumption and tighter coal availability last year resulted in lengthy power cuts in parts of the country, prompting authorities to increase the supply of domestic coal to utilities. The Indian government also mandated CIL to import coal for the blending requirements of all domestic power utilities for the first time since 2015.

Coal accounted for 50pc of India's power generation feedstock in 2022. Gas' share was 6pc out of the 60bn m³ demand last year, the majority of which were for sectors including fertiliser and city gas.

By Rituparna Ghosh

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