India Again Projects Power Surplus After Two Years of Misses

(Bloomberg) -- India forecast for a third year that it will be able to supply more electricity than its distribution companies require as generation and transmission capacity rises.

Supply from power plants will exceed demand from distributors by 4.6 percent, the Central Electricity Authority said in its Load Generation Balance Report for the year to March, released this week. Available generation capacity is expected to exceed consumption by 2.5 percent at peak periods, said the authority, an arm of the federal power ministry.

The CEA had also projected surpluses for the previous two years, though both ended up in deficit. The agency blamed last year's shortfall on fuel and distribution constraints.

The outlook for this year factors in 9.6 gigawatts of new generation capacity from conventional sources, with about 85 percent of that coming from thermal plants, as well as an expansion in the transmission and distribution network.

The CEA's demand forecast is based on estimates of what state distribution companies plan to buy from generators. That means it may not reflect latent demand from under-served customers or communities, according to Ashish Sethia, head of Asia-Pacific research at Bloomberg NEF in Singapore.

Every Home

Prime Minister Narendra Modi's plan to bring power to every home by March 2019 relies heavily on India's state distribution companies, called discoms. Their poor financial health has kept them from upgrading infrastructure and buying enough power to serve their areas, keeping millions in the dark.

Electricity demand from the distribution companies this fiscal year will grow 10.2 percent from a year earlier to about 1.34 trillion kilowatt-hours, according to calculations based on CEA's data. Demand last year rose 6.1 percent, according to the CEA report, compared with an expected 7.6 percent.

--With assistance from Anindya Upadhyay.

To contact the reporter on this story: Rajesh Kumar Singh in New Delhi at rsingh133@bloomberg.net

To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Reinie Booysen

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