How Discoms Will Be Hit If They're To Meet Peak Demand Of 250 GW In April-June

As peak electricity demand is expected to breach the 250-gigawatt mark between April and June this summer, generators are preparing to maintain higher levels of coal stock and are confident of meeting this requirement.

However, this is likely to raise the cost of power distribution companies, which may have to purchase power at a higher cost in an election year.

To meet the exigencies in the coming months, the Ministry of Power this week extended the deadline for blending imported coal at thermal plants to June from March. It had already extended the deadline for imported coal-based plants to June under Section 11 of the Electricity Act, 2003, in October last year.

In 2023, India touched a peak power demand of 240 GW in September.

"Industrialisation, infrastructure activities, and (the) Saubhagya Scheme have led to the creation of huge demand for electricity even in rural areas," Praveer Sinha, managing director and CEO of Tata Power Co., said. "To cater to this, efforts have been made to keep the power plants ready for any eventuality. Companies have undertaken maintenance shutdowns during winters and have kept the plants available for summers."

"We believe the addition of substantial renewable capacity will help to meet the peaking requirement during the daytime, apart from the base load that would come from thermal power plants,” Sinha said.

However, there are others who believe power demand can definitely be met, but it will come at a higher cost to the distribution companies.

According to a senior consultant with a foreign advisory firm, availability of power will not be a problem in the coming summer since the government will ensure demand is met in the election year. A lot of this power will be bought on exchanges, as merchant sales are priced comparatively higher.

This consultant said on condition of anonymity that high tariffs from imported coal-based plants are also a pass-through and discoms have to compulsorily buy that power.

The way out is to increase the renewable capacity at a faster pace compared to the 13 GW added in 2023, he said.

The annual requirement to meet the 2030 target of 500 GW is around 30–40 GW.

The consultant said India must focus on adding storage capacities by reducing tariffs on such plants to Rs 3–4 per unit from the current Rs 8–10 at present to make them viable.

Two-Pronged Strategy

Gautam Das, founder and CEO of Oorjan Cleantech, said the spike in demand can be addressed in two ways: a reactive and short-term action plan and a long-term plan.

In the short term, the government should manage demand and supply by influencing consumption patterns across time of the day, Das said, adding that all spare capacity should be assessed and activated to add to the supply side.

"The long-term plan is to build capacity with utmost priority for renewable energy sources," Das added.

As of March 6, India’s total coal stock stood at 46.3 million tonnes, or 67% of the normative coal requirement of 68.63 MTPA.

Domestic thermal plants had a total coal stock of 43.47 million tonnes, or 68% of the normative coal requirement. Out of this, imported coal constituted 1.9 million tonnes.

Imported coal-based plants had a stock of 2.83 million tonnes, or 60% of the normative coal requirement.

According to the Grid Controller of India, power demand in February and March averaged around 220 GW.

On March 6, the peak demand met during the day was 213 GW, which is expected to rise to 250 GW during April–June.