India’s power demand expected to slow down

Fitch Ratings: After post-pandemic spike of 11.3% in first half, forecast for second half is 8%

GN Bureau | December 20, 2022

#Power   #economy   #energy   #electricity  
(Photo: GN)
(Photo: GN)

Growth in India’s power demand is likely to decelerate in the second half of the financial year ending March 2023 (2HFY23), after robust 11.3% y-o-y growth in 1HFY23, Fitch Ratings says.

Power demand in 1HFY23 benefited from a post-pandemic rebound in demand and a low base during 1HFY22. Fitch expects India’s power demand to grow by around 8% in FY23 (FY22: 8.2%), it said in a release Tuesday.

Fitch expects thermal power plants' average plant load factor to remain above 60% in FY23 (1HFY23: 64.5%), benefiting from continuing power demand growth. Fitch expects improved domestic coal supply will support coal inventory at power plants and should moderate coal import growth from current high levels, although imports are expected to remain robust.

Fitch estimates generation companies' (gencos’) receivable position to improve as distribution companies have started clearing their dues to gencos following imposition of the late payment surcharge rule by the central government.

Renewable capacity addition is likely to soften in 2HFY23 (8.2MW: 1HFY23, 15.5MW: FY22) and there may be deferment in capacity additions due to high commodity prices, supply chain issues and higher import duties on solar modules and cells from April 2022.

Capacity Addition to Slow Down

Fitch expects renewable capacity addition to soften in 2HFY23 (8.2MW: 1HFY23) with some capacity deferred due to current high commodity prices, higher import duties and supply chain issues. Solar continued to lead the capacity additions with 6.8MW in 1HFY23. This could partly be due to advance procurement of solar equipment  by a few  developers ahead  of  imposition  of the basic custom  duty  (BCD)  of  40%  and  25%  on  solar  modules and  cells, respectively, from April 2022, replacing the safeguard duty of 15%.The government does not intend to provide exemptions to the BCD.

Support to Increase Renewable Capacity

The central government aims to generate 50% of India's electricity from renewable sources (including    hydro power) by 2030 (7MFY23:  29%, FY22: 24%). The government plans to achieve its target through Green Open Access (OA), the success of which depends on timely and effective implementation of rules by state power regulators.

Read the full Fitch Ratings reports here:



Other News

Boost to offshore wind energy projects

In a major decision, the Government has decided to grant waiver of ISTS charges to Off-Shore Wind Projects and extend the waiver to Green Hydrogen/Green Ammonia. This decision has been taken to facilitate wider execution of offshore wind energy initiatives, to promote the expansion of Green Hydrogen / Gree

Duty of stakeholders to provide cost effective, alternate energy fuels: Gadkari

Urging use of alternative and cost effective fuels to reduce pollution caused by vehicles, union road transport and highways minister Nitin Gadkari on Thursday said finding cost-effective fuels is the need of the hour and underlined that use of fuels like bio-CNG and green hydrogen help in protecting the e

Record production of rice, wheat, and sugarcane estimated

The foodgrain production of 3305.34 lakh tonnes is estimated in the current agricultural year 2022-23 – higher by 149.18 LMT as compared to the previous year, according to the Third Advance Estimates of production of major crops released by the ministry of agriculture and farmers welfare.

India`s ‘AIRAWAT’ ranks 75th in top 500 Supercomputing List

The AI Supercomputer ‘AIRAWAT’, installed at C-DAC, Pune, has been ranked 75th in the world. It was declared so in the 61st edition of Top 500 Global Supercomputing List on Tuesday at the International Supercomputing Conference (ISC 2023) in Germany. It puts India on top of AI S

Ocean Dialogue a great opportunity for G20 members

The ongoing third Environment and Climate Sustainability Working Group G20 meeting (May 21-23) has focused on three aspects: land degradation and reclamation of mining areas, Blue Economy and sustainable ocean management and resource sufficiency and circular economy. Leena Nandan, secretary,

Semi hi-speed trains, buses could be primary alternative to cars

We are not paying sufficient attention to the rapidly growing oil imports (from pre-Covid-19 to post-Covid, in 2022). They surged from 102 million tons (MT) in 2019-20 to 168 MT in 2022-23, an increase of 68%.   India is the largest importer of oil in the world, and, at current rate, we

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Current Issue


Facebook Twitter Google Plus Linkedin Subscribe Newsletter