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Centre scales down power demand forecast

Power ministry has scaled down projection of demand from the earlier estimated 289 giga watts (Gw) to 239 Gw by 2022

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Power Demand Forecast

Shreya Jai  |  New Delhi 

Centre scales down power demand forecast

The power ministry has scaled down its projection of demand from the earlier estimated 289 giga watts (Gw) to 239 Gw by 2022. According to ministry officials, the new projection has been arrived at after taking into account slow industrial growth and its corresponding impact on power demand; lag in transmission planning; and the weak financial state of state-owned power distribution companies (discoms).

"The new projection is based on estimated annual gross domestic product (GDP) growth rate of eight per cent. The earlier demand estimate was made in 2013, when it was assumed that demand would touch 199 Gw; it is currently 155 Gw," said an official, who did not wish to be named.

In the 18th Electric Power Survey of 2013, the Central Electricity Authority had estimated the power demand by the end of the 13th Plan period (2017-2022) to be 289 Gw.

The current installed capacity in India is 298 Gw. During the 12th Plan, capacity addition of 88,537 Mw has been planned from conventional sources (thermal, hydro and nuclear). Till February 2016, the total capacity addition was 75,195 Mw.

At the same time, renewable power generation has witnessed unprecedented growth. According to officials, this will hurt the average plant load factor (PLF) of the whole sector.

Solar power exceeded its generation target by 116 per cent to touch 5,000 mega watt (Mw) in the last financial year and wind exceeded its target by 38 per cent, taking the total renewable capacity to 38,000 Mw.

"Renewable energy runs at an average PLF of 20 per cent during off-peak hours and 80 per cent during peak hours. When more renewable energy is being added, as envisaged, it is likely to bring down the average PLF to 55-60 per cent," said an official. The National Democratic Alliance (NDA) government plans to add 175 Gw of renewable energy by 2022.

NTPC had recently said one reason for low PLF at its thermal power stations was due to the rising share of clean energy. It also said as the power demand remains tepid from the states, the PLF declined to 77.8 per cent in 2015 from 79.3 per cent last year and 85 per cent in 2012-13. NTPC is India's largest thermal power producer with total installed capacity of 45,548 Mw.

The government's ambitious action plan called Transforming India estimates India's economic growth at 10 per cent per annum till 2032. This could help the country become a $10-trillion economy with no poverty by that year. The plan envisages achieving 100 per cent rural electrification by May 2018.

Electricity demand growth is estimated at 0.9 per cent of the GDP growth.

In 2011-12, more generation capacity was added than targeted. A record 52 projects, most of these allocated in 2007-09, were commissioned by the private sector. The next financial year also saw capacity addition of 20,121 Mw, including in ultra mega power projects of 4,000 Mw, compared with the targeted 15,154 Mw.

Capacity addition started slowing down in 2013-14, when less than 40 per cent of the target was met. Local gas supply dwindled, coal linkages with state monopoly Coal India were left unmet and captive coal allocations went under litigation.

Now that the supply of coal and gas has improved, the demand for power has stagnated. State-owned discoms have a cumulative debt burden of Rs 4 lakh crore. Since 2013, no state has signed any new power purchase agreement except one by Kerala, which saw bids in the range of Rs 3.6 to Rs 7.29 a unit - the highest in the past two years.

Meanwhile, mismatched transmission planning has led to power-surplus states in western Indian grappling with no evacuation to electricity-deficit states in the south, north and northeast with unexploited hydro power.

According to power ministry officials, 'open access' would be the game changer for the power sector. Currently, the open access policy under the Electricity Act 2003 allows only consumers with electricity load above one Mw to procure power directly from markets. Amendments to the Act would allow consumers of less than 1 Mw also to choose their supplier. Power generators, too, will be allowed to sell their surplus outside their state. The amendment Bill is yet to be placed in Parliament. It was not listed in the past two sessions even though the final draft was ready.

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First Published: Mon, April 25 2016. 00:25 IST
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