In this episode of the State of the Economy Podcast, host Rishi Ranjan Kala discusses India’s rising power demand with Anujesh Dwivedi, Partner, Deloitte India, an expert in the power utilities and renewables sector. Dwivedi highlights the rapid growth in India’s power demand, which has been increasing by over 5 per cent annually and saw a 12-13 per cent rise last year. In May 2024, India recorded its highest ever peak demand of 246.1 gigawatts, driven by searing heat waves across northwestern and central India. 

Dwivedi explains that the daytime peak demand is largely met due to the substantial solar capacity in the country, while the challenge lies in the evening when solar power is not available. He commends the government’s efforts in managing this demand through various measures, such as mandating coal and gas-based plants to be available during summer months, rescheduling plant maintenance, and increasing coal production. These steps have helped ensure that the demand is met despite the challenges. 

Renewables, particularly solar energy, have played a crucial role in managing daytime peak demand. However, evening peaks still rely heavily on thermal power. Dwivedi also discusses the potential of renewable energy combined with storage solutions to provide reliable, dispatchable power. He notes that while renewable energy tariffs are competitive, the integration of gas-based power, especially if GST is removed from gas, could further support the power sector. 

Urbanisation and economic growth are major drivers of increasing power demand. Dwivedi emphasises the correlation between development and energy consumption, predicting that as India’s per capita GDP rises, so will its electricity consumption. The conversation concludes with a look at the future impact of electric vehicles and AI-driven data centers on power demand, highlighting the need for continued innovation and adaptation in the sector.

( Host : Rishi Ranjan Kala, Producers: Anjana PV and Siddharth Mathew Cherian)