April–January witnessed a 1.4% shortfall in power supply

According to statistics from the Central Electricity Authority, the country’s power supply saw a 1.4% shortfall from April to January, with the power firms only able to produce 239.93 GW of the 243.27 GW total power demand. In 2022–2023—when the peak demand for electricity reached 215.89 GW—this shortfall was at 4%.

The government has set a goal of 1,750 billion units (BU) for power production in 2023–2024. Only 1,354.97 BU of the 1,358.6 BU of power required by the nation in the first eleven months of FY24 could be used. 1,624.16 BU were produced in the nation in 2022–2023.

However, during the previous 11 years, the power supply deficit has reduced, from 9.0% in 2012–13 to 4.0% in 2022–23. This may be attributed, among other things, to license-free production and distribution, phased open access in distribution, and open access in transmission, among other provisions of the Electricity Act 2003.

India is capable of producing 429.96 GW of electricity in total, of which 240.44 GW come from fossil fuels and 189.53 GW from non-fossil fuels. Since India continues to depend on thermal power to fulfill its growing energy demand, the percentage of coal-based power generation is expected to rise in the coming years along with the rising share of renewable energy.

Additionally, up to January of FY24, the nation’s coal and lignite-based power plants’ plant load factors increased to 68.48%. The PLF of these plants was 64.15% in 2022–2023. The all-India thermal plant load factor (PLF), which was predicted to be about 68.0% in FY24, is likely to continue to increase, according to ICRA’s statement from last month, reaching 69.0% in FY25. It also said that the limited expansion of thermal capacity and the rise in power consumption would drive this.

In 2023, the nation’s need for electricity increased by 7%. Then, in order to keep up with the growing demand for energy, the government declared that 80 GW of additional thermal power capacity will be added by 2031–2022. The International Energy Agency predicts that the demand for electricity would rise by 6.5% on average between 2024 and 2026, the highest growth rate among the big nations. The country’s growing air conditioner ownership and robust economic activity both encourage this. As per the IEA assessment released last month, India’s energy demand is expected to increase by around the same amount as the UK’s current usage over the next three years.

Furthermore, India is the only nation where there was no significant decline in energy wholesale costs in 2023. According to IEA, prices were almost twice as high in 2019 even though they decreased by 4% in 2023 to Rs 5,540/MWh. “Prices remained high due to the tight supply situation caused by strong demand growth,” it said.

In contrast to the government’s original forecasts of 229 GW, the country’s peak demand in 2023 reached 243 GW. As previously reported by Bloomberg, the government has increased its peak power demand prediction, now projecting it to reach 384 GW in the 12-month period ending in March 2032—a 5% rise from its previous estimate released in May.