India’s power demand fell 2 percent year-on-year in June to 150 billion units (BUs) — down for a second consecutive month — as above-normal rainfall lowered temperatures in most of the country, making electricity prices in the spot market cheaper by 26 percent on year, a report by Crisil Intelligence said on July 9.
“The average market clearing price (MCP) in the real-time market (RTM) declined 26 percent on-year to Rs 3.73 per unit in June, indicating ample availability amid tepid electricity volume requirement. The average MCP during solar hours (11 am to 4 pm) was Rs 2.1 per unit compared with Rs 3.3 per unit in June 2024, with prices in some time blocks nearing zero. The average MCP during non-solar hours (12 am to 11 am and 4 pm to 12 am) was Rs 4.2 per unit versus Rs 5.6 percent unit in the corresponding month of the previous year,” the report said.
For May as well, Moneycontrol had reported that spot electricity prices on power exchanges slumped about 25 percent on average from a year ago, briefly hitting zero on May 25 as unseasonal rains lowered temperatures, cutting power demand of appliances such as air conditioners.
The Crisil report said the June power demand in the northern region decreased by 5 percent on-year compared to a 23 percent rise a year ago. In the southern region, however, power demand increased 5.3 percent on-year, in line with a rainfall deficit of 5 percent in the southern peninsula this June.
Also Read: Electricity futures can bring down price of power in spot market, says NSE
This year, the southwest monsoon had covered the entire country by June 29 as against the normal date of July 8. The peak power demand touched 243 GW this year, much lower than the 270 GW projected for this year. However, senior power ministry officials told Moneycontrol that India may now witness current year's peak power demand in September, courtesy the early onset of monsoon and pre-monsoon rains during summers.
“…while rains limited power demand growth, manufacturing activity provided support. The seasonally adjusted India Purchasing Managers’ Index, a proxy to gauge the country’s industrial activity, printed at a 14-month high of 58.4 in June. The reading was above the long-term average of 54.1, fuelled by expansion in output, new orders and job creation,” according to the report.
Tracking the fall in power demand, electricity generation too declined 0.8 percent on-year to 161 billion units in June. Coal-based power generation fell 7.2 percent on-year vs a rise of 10 percent on-year in June 2024. Coal accounted for 65 percent of the total power output vs 70 percent a year ago, which highlighted the ease of ramping up or down the fuel’s usage in times of high or low power demand.
Nuclear energy generation rose 5.7 percent on-year on account of increased generation from the recently commissioned RAPP-7, whereas higher rainfall resulted in a 30.3 percent on-year rise in hydro power generation. Renewable energy generation rose 19.3 percent on-year.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
