The Indian mind in May is occupied with only two things first is which leader to elect and the other is which cooling appliance to select as the temperature soars in various parts of the country. The Indian Meteorological Department (IMD) in its monthly outlook last week said that normally the heat wave prevails over northern plains, central India and adjoining areas of peninsular India for about three days in May. However, during this year, the number of heat wave days is likely to be above normal by about five to eight days over various parts of India.
With the increasing temperature and heat waves becoming more common, the demand for cooling and air conditioning spikes dramatically. This surge in consumption often leads to peak power usage, straining electrical grids and driving up electricity bills for consumers. According to the Central Electricity Authority (CEA), India’s peak power demand can reach to 260GW this summer compared to 243GW in 2023 against a projection of 229GW.
“India's ongoing severe heatwave has driven power demand to a seasonal high of more than 234 gigawatts (GW). This sustained increase in power demand explains the growing pressure on India's power infrastructure and highlights the necessity for robust energy planning and management to meet the rise in the power demand,” said Amit Jain, Chief Executive Officer (CEO) and Country Manager ENGIE, India.
Peak electricity demand under present policy conditions will increase by almost 60 per cent from 2022 levels by 2030, with cooling contributing nearly half of this increase. Addressing the world's expanding cooling needs sustainably, lowering peak demand through demand-side management and energy efficiency policies can help to mitigate grid impacts and reduce the need for costly standby generation capacity and storage. Under India’s G20 presidency, the need for effective cooling and thermal comfort has been acknowledged in the G20 voluntary action and strategic plan for advancing energy efficiency across demand sectors by 2030.
“In the first two months of the current financial year, India’s electricity consumption has increased by almost 14 per cent YoY. In anticipation of this high demand, the government and regulators proactively implemented a series of favourable policy and regulatory measures to increase fuel supply. These measures improved supply and increased sell liquidity on the exchanges, which in turn kept the prices under control on the exchanges. So far in May, prices on the Day-Ahead Market (DAM) and Real-Time Market (RTM) have averaged Rs 5.3/unit and Rs 4.6/unit, respectively. The prices during the day hours averaged less than Rs 3.50/unit,” said Rohit Bajaj, Executive Director, Business Development, Strategy and Regulatory Affairs, Indian Energy Exchange (IEX).
According to the International Energy Agency (IEA), for every 1-degree increase in the average daily temperature above 24 degree Celsius in India, it increases a 2 per cent of rise in electricity demand. Demand fluctuations brought on by shifting cooling requirements also pose the risk of shortages, limitations, blackouts, and brownouts. To handle demand spikes, grid operators turn on older, more polluting, and inefficient power facilities.
The Power Ministry has extended Section 11 of the Electricity Act, of 2003 until September, directing all imported coal-based power plants to operate and generate power to the fullest extent possible, and exploring new capacities to ensure that electricity is available and that it can meet the projected 260 GW summer power demand. Accordingly, to guarantee a sufficient supply of coal for thermal power plants, the coal ministry has also intensified its efforts with increased coal production by public sector firms.
The Indian government, earlier in 2024, issued an order applicable between 1 May and 30 June to increase power generation from gas-based power plants in anticipation of a power crunch this summer season. This will help serve part of the demand while the dependence on coal continues. The CEA’s monthly coal statement of thermal power stations showed that total consumption in March was at 74.5 million mt, rising about 7 per cent year on year.
According to the National Load and Dispatch Center data for 6 May gas-based power generation was at 157 million units, which is 3 per cent of power generation in India. Compared with the data for 1 April, the generation was 102 million units, which was 2 per cent of power generation in India.
“A combination of measures undertaken by the government and regulators to ease the supply crunch, ample availability of fuel, and an increase in thermal-based power generation have added to the stability in power prices. The prices are further expected to remain stable with the addition of hydropower during monsoon. As prices continue to remain competitive, there will be an opportunity for DISCOMS and Commercial & Industrial consumers to optimise their power procurement costs by leveraging power exchanges,” said Bajaj.
The decisions made by customers are likewise important. The average air conditioner sold is less than half as efficient as the best-performing model available, according to the most recent market data. Furthermore, choosing an efficient model need not always result in a greater cost. Various practices like implementing Minimum Energy Performance Standards (MEPS) and labels that indicate the energy efficiency of equipment and appliances- have shown remarkable results. MEPS and labellings have contributed to more than halving the energy usage of air conditioners in nations and areas such as the US and the EU.
“The strategic expansion of renewable energy sources is crucial as the country diversifies its energy mix to address climatic challenges and align with the global shift towards sustainable energy practices. Solar energy, in particular, is well-suited to summer demands, as peak sunlight hours coincide with peak electricity needs for cooling. By harnessing abundant solar power, India can significantly reduce reliance on fossil fuels,” said Jain.
The rising frequency and intensity of heat waves have a profound impact on power consumption and electricity bills. During peak heat periods, the demand for cooling systems surges, leading to significant spikes in electricity usage. This heightened demand often strains power grids, increasing the risk of outages and driving up the cost of electricity. Consequently, households and businesses face inflated electricity bills, exacerbating financial burdens. To mitigate these effects, it is crucial to invest in energy-efficient technologies, improve grid infrastructure and promote sustainable practices to balance energy demand and supply during extreme weather events.
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