The cold wave conditions in January 2023 drove north India’s power demand, which grew 18 per cent Y-o-Y at 186 gigawatts (GW) during the month with expectations that going ahead electricity demand will be in the range of 7 per cent on an annual basis.

S&P Global Commodity Insights in a report on Friday pointed out that the strong power demand in January was mostly driven by colder than normal weather as heating degree days (HDDs) for January was on average 1.5°C higher per day.

However, since January 21, the weather flipped and turned warmer than normal and is driving cooling demand. For February 1-12, the cooling degree days (CDDs) were about 2°C higher per day Y-o-Y, and power demand has averaged 197 GW and is about 13 per cent higher compared to the same period one year ago.

“S&P Global Commodity Insights believes power demand will come down from double digit growth as the weather normalises but should still be robust going forward at around 7 per cent,” it added.

Last month, Crisil Market Intelligence & Analytics in a report said it expects power demand to remain buoyant in the coming summer and grow 8-9 per cent Y-o-Y during April-September next fiscal (FY24).

The International Energy Agency (IEA) 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.

However, the agency expects a slightly slower growth rate averaging at 5.6 per cent per year for the 2023-2025 period.

RE power rises, but coal is still the King

Renewables power generation is at a seasonal low during winter, but both solar and wind generation showed Y-o-Y increases of about 3 GW each. However, the large change in generation for January 2023 when comparing with a year earlier is from coal, which increased by over 20 GW to 148 GW, S&P said.

“Strong coal-fired power generation during the first part of the year limited some replenishment of coal stocks, but stocks at the end of January are still large enough to cover for 12 days of generation, which is an increase of about three days on the year,” it added.

Thermal fuel

Coal-fired power generation will continue to be the thermal fuel that will meet fluctuations in power demand and could reach new record highs during the spring season, especially during periods with higher-than-normal weather. The spring is usually the period with high demand for thermal fuels in the power sector, as hydro and renewables pick up during the summer months.

“S&P Global Commodity Insights believes coal-fired power generation will average 142 GW for Q2, which would be 3 GW lower year on year,” it has projected.

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