India’s coal-fired power output falls for consecutive months for the first time since 2020

Heavy monsoon rains have dampened India’s power demand growth over the past two months and led to the first time since the pandemic that coal-fired power output has fallen year-on-year for two consecutive months.

Electricity demand usually moderates during India’s monsoon season, which is between June and September. This year, excessive rainfall also helped hydropower generation, further reducing demand for coal-fired electricity.

Power generated by India’s coal plants fell 5.8 percent in September from a year earlier, after falling 4.9 percent year-on-year in August, according to data from the federal regulator. of the Grid-India network, analyzed by Reuters.

To compare, India’s coal-fired power generation rose 10% between January and July.

In addition to higher hydropower production due to heavy rains in the monsoon season, India’s coal-fired power generation has also been reduced to some extent by increased solar power generation. That generation rose 26.4 percent in September compared to the same month in 2023, for the largest one-year increase in solar power output, according to data cited by Reuters.

Stronger solar power generation pushed the share of renewable energy in India’s electricity generation to a record 13.9 percent during the third quarter of 2024.

In August, India’s electricity demand was estimated to have fallen by about 5.3 percent year-on-year, CRISIL, an S&P Global company, said in a September report. This was the first time in the last 15 months that India’s electricity demand fell compared to the same month of the previous year. Coal-fired output fell about 3 percent in August from a year ago.

However, coal remains a mainstay in India’s power generation.

“Thermal power is likely to continue to play a key role in India’s power sector over the medium term, at least until advances in energy storage technology become more widespread,” Fitch Ratings said last week in a report on power market in India.

This year, energy demand will grow by about 8% in 2024, accelerating from 7.6% in 2023, Fitch noted.

By Charles Kennedy for Oilprice.com

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