Electricity demand outpaces official forecasts by over three percent in summer months

India's actual power requirement surpassed official government projections by 3.3 percent between April and August of the current financial year. Deficient rains and continuous high temperatures drove electricity consumption well above normal levels. Normally, actual power demand stays below the short-term estimates made by the Central Electricity Authority.

Impact on Power Supply

This gap forced power plants to rely more heavily on coal, pushing coal-based electricity generation nearly 10 percent higher than the same period last year. Coal-based plants produced 579,869.38 million units between April and August, up from 527,542.87 million units previously. Meanwhile, hydropower generation dropped by over 11 percent to 75,304.58 million units due to low water reservoirs. Coal inventories at thermal power plants dropped to 18.6 million tonnes by September 30, down from about 55 million tonnes in early April. To manage the shortage, the power ministry ordered around 112 captive coal-based power plants to run at top capacity from October 1 to December 31.

Demand Reversal

Rainfall in parts of northern and eastern India helped reduce electricity demand starting in September, reversing the earlier pattern. Officials expect the gap to slowly narrow and match projected levels over the next two to three months. Similar deviations occurred in 2022 and 2023 during the post-pandemic economic recovery, though the gaps were much smaller at 1.8 percent and 0.75 percent respectively.

Context

The Central Electricity Authority prepares the Load Generation Balance Report each year to help agencies like the Railways and coal companies plan their resources. When actual demand deviates heavily from these plans, it creates logistical challenges for fuel supply and grid management across the country.