NEW DELHI: With the Indian Meteorological Department (IMD) projecting a hot summer, with above-normal temperatures and an above-normal number of heatwave days from March to May, all precautions have been taken to ensure the current summer doesn’t see serious power outages, government sources say.
Experts see demand for power this year to be significantly higher on year –peak demand in 2024-25 is expected to grow by 6-7% from 243 gigawatt (GW) in FY24.
To ensure availability of electricity and be able to meet the summer power demand projected at 260 GW, the power ministry has taken several measures including the extension of Section 11 of the Electricity Act, 2003 till September, guiding all imported coal based power plants to operate and generate power to their full capacity and expedition of new capacities. In line with this, the coal ministry has also stepped up its efforts with increased coal production by public sector undertakings in order to ensure adequate supply of coal to thermal power plants.
The moves are also in recognition of the need to avoid an energy crisis at a a time many industries are witnessing higher capacity utilisation and an investment cycle is believed to have begun.
Coal India – the country’s major coal mining and producing company, has targeted to supply 171.4 million tonnes of coal to the power sector in the first quarter of the current financial year, up 11% from 153.4 million tonnes supplied in Q1FY24, said a source who did not wish to be identified.
“We are in a comfortable position right now. We have 91.65 million tonnes stock in the pithead site and 46.90 million tonnes at the plant side which is 19 days of coal stock,” a source said. “This quarter we are increasing production by about 11% from the same period last year. That way production will improve, already stocks are more as compared to last year and we are ready to supply whatever demand is there,” the person added
For the financial year 2024-25 the power ministry has placed a demand of 874 million tonnes of coal. Of this, Coal India is expected to supply 661 million tonnes of coal, according to the source.
Coal stocks at the country’s power plants – both domestic and imported coal based – stood at 49.5 million tonnes as of April 8, against the normative stock level of 70.5 million tonnes, latest data from the Central Electricity Authority showed. Additionally, of the 185 power plants across the country, 19 reported having a critical stock. Analysts see the situation improving with easing supply of imported coal.
“If you see the availability of coal stocks, they are better this fiscal than what they were in this period last year. Last year, the coal stocks in March were about 13 days, now it has increased to over 15 days at an all India level and even the prices of imported coal have come down from the peak we saw in FY22,” said Vikram V, vice-president & sector head, corporate ratings, Icra. “The ability of the sector to utilize the imported coal based plant is also in a good situation.”
NTPC, the leading integrated power utility, has also announced its plans of boosting its captive coal output by 17% to 40 million tonnes in FY25.
Additionally, the coal ministry envisages a growth of 7% in its rake availability in FY25 compared to previous fiscal and is actively engaged with the railway ministry to ensure adequate coal evacuation. The average availability of rakes for transportation of coal has improved to 392 rakes per day in the year 2023-24 from 369 rakes per day last fiscal, coal minister Pralhad Joshi had earlier said.
New gas based capacities are also expected to come up in order to meet any shortfall in the demand owing to the softening gas prices, experts say. To ensure the same, the power ministry will also hold a meeting with all developers of gas-based power projects to review the operationalization of gas-based capacity during the summer season.
“During the upcoming summer season, we do not see any significant gap between demand and supply that will impact dynamic prices. There has been a surge in sell-side liquidity due to sizeable capacity additions in renewable and thermal power while gas based power plants are coming back due to sharp fall in gas prices,” an official industry source who did not wish to be identified had said.
To make power available to consumers during the peak demand, the power ministry has also sought compliance to the supply of surplus electricity by generating companies to power exchanges.
In FY24, power exchanges reported a growth rate of 18% against just 2% in FY23, according to a latest report by ICICI Securities. Exchanges volume grew by two times the demand print of 8% in FY24, it said.
However, any spurt in the demand owing to increase in the number of heatwave days or weak monsoon may create challenges and would require measures to augment coal supplies.
“If there is sudden spurt in demand owing to heatwave or El Nino, then there could be some challenges and we will have to look to augment coal supplies,” Vikram had said.
In FY24, the peak demand met grew by 13.9% from 210.7 GW the previous fiscal year to 239.9 GW. Relative to FY23, the energy requirement grew by 7.5% in the last financial year and the energy availability grew by 7.8%, resulting in a reduction in total energy shortfall from 0.5% in 2022-23 to 0.2% in 2023-24, according to government data.
Source: The Financial Express