India’s peak power demand is expected to grow around 6 per cent Y-o-Y to around 225 gigawatts (GW) in the current calendar year beginning April 2023, with the first-half expected to witness huge spikes in consumption due to the summer season.

“We expect peak demand to hit around 225 GW this summer on account of expanding industrial activity and rising domestic consumption. Further, we expect summer on the lines of last year, if not higher, which will also push demand,” a senior government official said.

Besides, the north and north-eastern parts of the country have witnessed severe cold waves for longer duration, which has led to higher use of heaters. This again strengthened demand during December 2022 and January 2023. So, demand will be largely higher throughout FY24, he added.

Analysts site similar estimates

Last week, Crisil Market Intelligence & Analytics Director (Research), Hetal Gandhi, said: “A hotter-than-usual summer, with high probability of multiple heat waves, is expected to keep power demand growing even next fiscal at 5.5-6 per cent, despite two straight years of robust growth. The first-half should see even higher growth given the summer.”

With better leverage profile, power sector has more reserve energy

The International Energy Agency (IEA) in a report last month said it expects demand growth to continue at close to 5.6 per cent on average per year during 2023-2025 (calendar year).

However, S&P Global Commodity Insights expects growth in power demand in the world’s third largest energy consumer to be higher at around 7 per cent on an annual basis in 2023.

Robust demand in FY23

Crisil estimates that demand for power in India is set to close this fiscal year with 9.5-10 per cent growth Y-o-Y, compared with 8.2 per cent growth in FY22. That would mark a decadal high rate of growth and almost double the 20-year average of 5.2 per cent.

Growth weighed in at 7.7 per cent in February and averaged 10 per cent Y-o-Y for the 11 months despite a high base of FY22 due to extreme weather events and robust industrial and manufacturing activity. March 2023 is unlikely to see any let-up amid early warnings on possible heat waves in the northern and central parts this summer, it added.

Electricity demand grew by 8.4 per cent Y-o-Y in 2022, driven by continued economic recovery after Covid and peak summer temperatures, the IEA said.

The agency has projected that over the next three years, more than 70 per cent of the growth in global electricity demand is set to come from China, India and South-East Asia combined.