India To Revise National Electricity Plan For Rising Power Demand
Photo credit Bihar State Power Transmission
Govt Mulls Changes In National Electricity Plan
By Sanjay Singh
New Delhi, October 7: As India’s power sector peak power consumption has reached around an unprecedented 260 gigawatts (GW) and expecting to touch this figure this year, a 20 per cent increase in just two years, has put the government in a dock as it has to fasten the process of revisions to the National Electricity Plan (NEP) 2022-27.
The current NEP needs an updating to address the new demand forecasts, with the government now anticipating the country’s peak power demand to hit 400 GW by 2031-32, exceeding the previously projected 384 GW. In June this year, saw power consumption rise to 152.4 billion units (BU), up 9 per cent compared to 140.27 BU in June 2023.
In May this year, India’s peak demand already reached 250 GW, surpassing last year’s peak of 243 GW recorded in September 2023. This rapid increase is attributed to rising per capita consumption, which has been growing at an average rate of almost 7 per cent over the past five years, from 184 GW in 2019-20.
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Extreme heat conditions and humidity have driven power consumption but several other factors contribute to this soaring demand. The use of air conditioners and cooling appliances has surged due to extreme heat and humidity, particularly with the arrival of monsoon rains. The government predicts that high humidity will continue to drive steady power consumption as cooling appliances remain essential.
In order to meet the growing consumption of power, the government has implemented measures which includes establishing new thermal units that are being commissioned to bolster capacity. However, the timely completion of these projects is crucial. Also blending imported coal at domestic coal-based plants and extension of Section 11 of the Electricity Act, 2003, until September and beyond if needed, mandates all imported coal-based power plants to operate at full capacity.
Besides, the coal ministry has increased coal production to ensure adequate supply for thermal power plants and improving the financial viability of distribution companies (discoms), which are currently grappling with over Rs 6.5 trillion in accumulated losses as of March 2023. Annual and cash losses stand at around Rs 67,000 crore.
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Also enhancing the integration of renewable energy sources is also critical to meeting future demand projections. The NEP outlines a total installed power capacity of 900 GW by 2031-32 to meet the anticipated demand.
India’s power generation and transmission sectors are expected to witness significant growth in the coming years, according to a recent report by Jefferies. The report projects that the power generation and transmission sectors will grow 2.2 times to $280 billion between FY24 and FY30 compared to FY17-23. Additionally, to sustain the economy’s rapid growth, power consumption is expected to increase by more than 7 per cent annually.
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