India’s power demand in July is projected to have increased by 7% to 150 billion units (BU) compared to the same period last year, largely due to higher consumption in the rain-deficient northern states. This follows an 8.6% rise in power demand observed in June. According to CRISIL, power demand during the first four months of the fiscal year 2024-25 has grown by 10% year-over-year.
In July, however, power demand in other regions saw a decrease as the monsoon rains helped lower temperatures. Data from CRISIL indicates that the southern region’s power demand increased by 4%, while the western region experienced a slight decline of 1%. The significant rise in demand in the northern region was mainly due to inadequate rainfall in Punjab, Haryana, and Rajasthan.
Meanwhile, Maharashtra and Gujarat saw rainfall levels 63% and 45% above normal, respectively, while Punjab and Haryana faced rainfall deficits of 44% and 41%, leading to higher irrigation-related power consumption in these key agricultural states.
The report noted that, excluding hydro power, energy generation from coal, nuclear, and renewable sources grew by 4%, 17%, and 12% respectively on a year-over-year basis. Conversely, hydro power generation fell by 6% year-over-year due to insufficient rainfall in the northern region. As of August 1, water levels in 10 reservoirs were at 33% of their total capacity, down from 76% the previous year, according to data from the Central Water Commission.
Coal supply to power plants has improved this fiscal year, with dispatches increasing by 6.7% year-over-year in the first quarter of 2024-25. By July 31, coal reserves at thermal power plants were at 46 million tonnes, sufficient for 15 days, compared to 36 million tonnes, which would last 13 days at the same time last year.
CRISIL anticipates a 6.5-7.5% rise in power demand for fiscal 2025, driven by weather fluctuations such as severe heat waves and insufficient rainfall in northern India. The increase in demand is also supported by robust economic activity, with the country’s GDP expected to grow by 6.8% year-over-year, as per the report.
