Power Demand In India Peaks In Aug-Sept Amid Strong Industrial Activity

India's power demand in August has surpassed consumption even during summer months, indicating strong industrial activity as the economy continues to grow. In the first six months of FY24, peak power demand touched an all-time high of 239.97 GW on September 1. Yet, August witnessed the highest average power demand of 216 GW as it turned out to be the driest August in a century.

High power demand in August is considered to be an aberration as it is a monsoon month. It has even beaten consumption during the peak summer months—May and June. Even in September, the first 24 days have seen an average power demand of 211 GW, more than 204 GW witnessed in May and on par with 211 GW in June, according to data provided by the Central Electricity Authority. 

The main reason for higher power demand in August and September, apart from industrial activity, was low and intermittent rains due to the El Nino effect in most of the country- except parts of northern India that witnessed higher-than-usual rainfall. 

The higher demand situation was effectively handled by the central and state governments by ensuring sufficient capacity of coal at the pit-head and non-pit-head power plants. The window for mandatory imports of coal by public and private plants was extended by six months, up to March 2024. 

It was also made mandatory to run the imported coal-based plants at full capacity under Section 11 of the Electricity Act 2003, where the higher coal price was to be compensated by buyers. The plant load factor at the imported coal-based plants significantly rose to 65 per cent in the six months to September following the government decision on mandatory import of coal from 40 per cent in April, and 23.1 per cent in March this year. 

Although the number of plants with critical coal stock position remains the same at 51 as of September 23, compared with March 31, the domestic coal-based plants with critical coal stock position has increased to 41 from 32 at March end. Plants designed on imported coal increased to nine from seven by March end.

Coal stock is considered to be critical when it declines below 25 per cent of the normative coal stock requirement. The actual coal stock of 2.48 crore tonne is only 48 per cent of the normative coal stock requirement of 5.13 crore tonne