<p>The power industry is optimistic that increased coal reserves and a reduction in the supply of imported coal would enable it to fulfill the country’s anticipated rise in power demand of 260 GW this summer.</p>
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<p>The forthcoming fiscal year 2024–2025 is predicted to have an average 6-7% rise in the demand for power. It is anticipated that more capacity increases across all categories would close the supply gap and satisfy the growing demand.</p>
<p>The availability of coal supplies is better this fiscal year than it was at the same time previous year, if you can observe that. According to Vikram V, vice president and sector head of corporate ratings at Icra, “last year, the coal stocks in March were about 13 days. This year, they have increased to over 15 days at an all-India level, and even the prices of imported coal have come down from the peak we saw in FY22.” “The industry is also in a good position to use the imported coal-based plant.”</p>
<p>Furthermore, it is anticipated that any demand shortage will be filled by further gas capacity increases brought about by the declining price of gas.</p>
<p>We do not anticipate a significant discrepancy between supply and demand that will affect dynamic pricing throughout the forthcoming summer season. Significant capacity expansions in thermal and renewable power have increased sell-side liquidity, while gas-based power plants are returning as a result of the steep decline in gas prices, according to an unnamed official industry source.</p>
<p>Any spike in demand, however, brought either by an increase in hot days or a poor monsoon, might pose problems and need adding to the supply of coal.</p>
<p>Due to El Nino conditions, the India Meteorological Department (IMD) had forecast earlier this month that there will be a scorching summer with above-average temperatures and a higher than average number of heatwave days from March to May.</p>
<p>“There might be some challenges and we will have to look to augment coal supplies if there is a sudden spurt in demand owing to heatwaves or El Nino,” Vikram said.</p>
<p>The industry participant said, “There are sufficient coal stocks available in the nation and more capacity can come online to address any surge in power demand in case of prolonged heat waves in the upcoming summer.”</p>
<p>The transmission segment may present some, if not significant, challenges because any RE capacity to come online and address the issue of intermittency will require a strong transmission network. This is true even though the strong capacity additions across segments and ample coal stocks provide a healthy scenario for the country to meet its power demand.</p>
<p>“For the purchase of transmission capacity, India has put in place a strong Tariff Based Competitive Bidding (TBCB) mechanism. However, a lot of projects have one to three year delays because of real problems. To finish these projects, enormous government assistance is needed, according to Pratik Agarwal, Managing Director of Sterlite Power.</p>
<p>In order to satisfy the peak demand, the nation faced a number of supply challenges during the current fiscal year, including low coal supplies and decreasing reservoir levels, which led to subpar hydel power output.</p>
<p>The production of hydel electricity has decreased by 17% in 2023–2024. According to the reservoir’s present level, hydropower output may not increase much, according to Vikram. “How the monsoon behaves also matters. El Nino may induce either a decrease in hydel production or an increase in demand due to heatwaves.</p>
<p>The nation is anticipated to install 5–6 GW of thermal capacity by March 1st, having added 1400 MW of nuclear power this fiscal year. “With an improved coal situation, all these projects should be able to meet demand,” Vikram said.</p>
<p>By the end of March, the nation’s stock of coal for use in coal-based thermal power plants is anticipated to reach 45 million tons, according to the coal ministry. Furthermore, it anticipates that by the end of this fiscal year, the total coal stock that is now accessible at all locations—including coal firms and power plants—will have increased to 155 million tonne from 135 million tonne. Approximately 85 million tonnes of coal are now in stock with the nation’s coal firms.</p>
