After two consecutive months of decline, power demand is estimated to have risen around 0.4 per cent year-on-year (YoY) to 140 billion units (Bus) in October, according to a report by Crisil. The power demand over the April to October period is likely to have increased by around 4.7 per cent on-year. Crisil market intelligence and analytics (MI&A) research has projected the power demand to rise 6 to 7 per cent on-year for the current fiscal.
As per the report, a pick-up in industrial activity as the festival season approaches has supported the power demand during the month. The power demand surged in October after the withdrawal of the southeast monsoon, with the country still receiving 3 per cent above-normal rainfall between 1 to 23 October.
The report highlighted that the moderation in construction activity which is generally on the lower side during this time of the year has curtailed a further rise in demand. In addition, as irrigation requirements tend to be on the softer side after the sowing season, the electricity consumption from the agriculture sector also decreases.
As far as the region-wise trends are concerned, the power demand in the northern and eastern states has increased by 13 per cent and 14 per cent on-year, respectively, during the month. However, the demand in the southern region, which also receives the northeast monsoon from October to December, has dipped 10 per on-year.
The report added that power generation is estimated to have surged around 2.4 per cent on-year to 152 billion units in October 2024. The generation of hydro, nuclear and renewable energy surged 43 per cent, 6 per cent and 1 per cent, respectively. The rise in hydro power generation appears to be sharp due to a low base effect as the generation had declined 31 per cent on-year in October 2023.
Coal remains the driver of electricity generation in the country. The report highlighted that to ensure uninterrupted generation, the despatch of coal to power plants increased by 4 per cent on-year in the first half of the current financial year, thereby increasing coal stocks. Going ahead, Strong economic activity, with estimates pointing to the country’s gross domestic product expanding 6.8 cent on-year this fiscal, is also seen boosting demand. With intense weather patterns expected to continue post-monsoon, power demand is estimated to remain elevated.