The Central Electricity Authority (CEA) has carried out a comprehensive study of projected electric power demand in the country. This will facilitate appropriate planning of generating capacity and accordingly commensurate transmission infrastructure.
Based on the study, the energy planner has estimated that power demand would increase at a compound annual growth rate (CAGR) of 6% to 2,473.78 billion units (BU) by FY32 from the current 1,381.65 BU in FY22.
The CAGR of power demand is expected to rise at a steep rate of 6.67% till FY27, but will come down to 5.33% in the next five years. Nevertheless, this was assessed to be lower than the corresponding consumption rate mainly on account of expected reduction in transmission and distribution losses.
CAGR of various parameters
Source: CEA
Another important deduction of the study is that CAGR of peak demand was estimated on the lower side than CAGR of power demand during the FY22-FY27 period, exhibiting a contrasting pattern seen in the past years.
Peak demand on an electrical grid is the highest electrical power demand that has occurred over a specified time period.
This estimation was based on the actual power scenario witnessed in the last two years when the country observed more than usual growth in power demand in comparison with peak demand because of Covid that led to an abnormal decrease in the load factor.
However, with the situation returning to normalcy, the load factor for FY23 is expected to be restored to pre-Covid levels. Thereafter, the system will resort to the usual pattern of more growth in peak demand in comparison with power demand.
Emerging factors impacting demand
The continuous increase in power demand has major implications for the coal industry as most of the power generation plants operate on coal.
During April-October this year, coal based power generation jumped 11% y-o-y to 657.78 BU as against 594.42 BU in the year-ago period.
The growing push for renewables poses a threat to the coal-based plants. Besides, there are various factors that might alter the demand dynamics altogether.
1. Electric Vehicles: India’s market is evolving to a new era of mobility with more thrust on electric vehicles that will result in more electrical energy demand from the grid.
2. Solar rooftops: As part of Intended Nationally Determined Contributions (INDCs), the country has committed to increase the share of installed capacity of electric power from non-fossil fuel sources. Installation of solar rooftops has been identified as a major avenue under this programme. However, with more such installations, power demand from the grid is expected to decrease in proportion.
3. Solar pumps: Under the PM-KUSUM scheme, the government has envisaged solarisation of 15 lakh existing grid-connected agriculture pumps that will boost power demand.
4. Green hydrogen Mission: The mission aims to aid the government in meeting its climate target and creating a green hydrogen hub. Total green hydrogen production of the country is estimated at 10 mnt by 2030. It takes 50 units of electrical energy to produce 1 kg of hydrogen. Based on the above assumption, additional power requirement on account of green hydrogen production has been estimated at 250 BU by FY 2031-32.
In addition, introduction of various programmes for demand side management, energy conservation and efficiency improvements would gradually promote power savings and bring down requirement.
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