- India's power demand rose 14.5% year-on-year in the first 20 days of September
- Coal stocks at thermal plants fell below eight days, with 40% critically low
- Renewable generation increased 39% in August, easing pressure on thermal power
India's power sector is heading into September with strong electricity demand and rising evening peak stress, even as renewable generation is helping ease pressure on conventional power generation, HSBC said in a sector note. The key concern is on the thermal side: coal stock availability at power plants has fallen to less than eight days, while around 40% of thermal plants are operating with critically low coal stocks.
At the same time, renewables are doing more of the heavy lifting. Renewable generation rose 39% year-on-year in August, according to HSBC, helping the share of thermal generation fall to a decade low for the month.
HSBC said power demand growth remained robust in the first 20 days of September, rising 14.5% year-on-year. Peak demand had eased to 258 GW in August but climbed back to 269 GW in September, highlighting continued pressure on the power system. The evening period is emerging as a particular pressure point. Hydro generation has remained weak, while renewable generation typically falls as solar availability drops later in the day. HSBC noted that evening stress rose as high as 7.7 GW, or 3% of instantaneous demand, on September 9.
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Renewables Do The Heavy Lifting
Renewable generation increased 39% YoY in August, supported by 3.8 GW of new renewable capacity, including 3.4 GW of solar and 0.4 GW of wind.
Thermal capacity, however, saw a net decline during the month. Around 1.6 GW of thermal capacity was temporarily removed and 0.4 GW was retired, while 0.8 GW was added through NTPC's Nagai 150 MW and SJVN's Buxar 660 MW units. Operational BESS capacity stood at 9 GW at the end of August, with another 80 GW under construction or per CEA.
Coal availability remains the bigger concern for thermal generation. HSBC said coal stocks at power plants had fallen to less than eight days of availability as of September 23, down from already low levels in August. Around 40% of thermal plants were operating with critically low stocks of less than 25% of required inventory. The decline comes alongside softer domestic coal trends, with August coal production down 13% year-on-year to the month's lows. Newcastle coal prices had also risen to around $145 a tonne as of September 17.
HSBC noted that the Central Electricity Authority has proposed making storage a requirement for new renewable projects commissioned from July 2027, with storage equivalent to at least 10% of installed capacity and a minimum two-hour duration.
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