The share of natural gas consumption by the power sector during November 2024 was the lowest in almost two years due to lower electricity generation by gas-based power plants on account of a decline in power demand.
According to the Petroleum Planning & Analysis Cell (PPAC), the power sector’s share in natural gas consumption last month slipped to 9 per cent which is also the lowest in the current calendar year.
Analysts and power sector players anticipate that the share in consumption during December 2024 will go down further and could be in the range of 6-8 per cent.
There could be a slight pick up in gas consumption by the power sector in January 2025 as the month generally witnesses cold wave conditions leading to more demand for heating and consequently impacts electricity consumption, said one of the sources.
Low electricity demand
The world’s fourth largest liquefied natural gas (LNG) importer has a gas-based power generation capacity of roughly 24 GW under operation.
The decline in share of power sector in the overall natural gas consumption by all sectors is also reflected in the PLF and gas consumption during November 2024, both of which are at record low.
The capacity utilisation by gas-based power plants slipped to the lowest in more than a year and a half at 7.9 per cent last month. Similarly, gas consumed/ supplied during the month was also the lowest in over a year at 11.12 million standard cubic meters per day (mscmd).
Gas based power plants generated 1,339.94 million units (mu) in November 2024, a decline of over 42 per cent m-o-m and 19 per cent on an annual basis. The generation during the month is also the lowest in the 2024 calendar year.
India’s energy consumption hit 125 billion units (bu) during November this year, a decline of 11 per cent m-o-m. However, usage rose by 5 per cent on an annual basis.
For comparison, the power sector’s share in natural gas consumption during May 2024 stood at 19 per cent, which is the highest in more than two years. Besides, the plant load factor, or capacity utilisation, by gas-based plants was the highest in five years during May.
Scorching summer temperatures coupled with heat waves pushed India’s peak power demand to 250 GW in May, which is an all time record and is more than the Power Ministry’’s projections for the month.
Higher gas consumption by the sector was due to the government invoking Section 11 of the Electricity Act, 2003, to ensure gas-based power plants were operational to meet summer electricity
The decline in power demand, which led to lower consumption by gas-based plants, was also reflected in the gas exchange.
The Indian Gas Exchange (IGX) said that Gas IndeX of India (GIXI) for November 2024 was ₹1,103 ($13) per million British thermal units (mBtu), which is almost the same as last month. However, all spot international gas benchmark prices rose on a monthly basis due to increased demand in international markets amid winters.
During November 2024, IGX traded 2.5 million mBtu (63 million standard cubic meters) gas volume, which is lower by 12 per cent y-o-y and 69 per cent on a monthly basis.