In May, India's coal-fired electricity output fell at the fastest rate in five years.
A government analysis showed that India's coal-fired power generation fell in May at the fastest rate in five years. The overall demand for electricity declined in August, and renewable energy production reached a new record.
A review of Grid India's data showed that the increase in power generation from cleaner sources such as hydro and nuclear led to the sharpest decline in the output of natural gas fired power in almost three years.
India, the world's second-largest coal importer and fourth-largest buyer of LNG, is experiencing a decline in the demand for fossil fuels to generate electricity. This comes as benchmark fuel prices are being pushed down.
The demand from the power industry - which is usually strong during peak seasons - was limited. In addition, economic headwinds are affecting non-power industries," Indian Coal Trader I-Energy stated in a recent note.
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India's coal fired power generation in May fell 9.5% on an annual basis, to 113.3 billion Kilowatt-hours. This is the largest decline year-on-year since June 2020 when the COVID-19 epidemic led to a national lockdown.
The world's third-largest emitter of greenhouse gasses could reduce its emissions if the demand for fossil fuels in power generation continues to slow down. It previously increased its reliance on coal as it sought to recover from a pandemic.
India has repeatedly cited its lower emissions per capita compared to richer nations in order to justify its high coal consumption.
The record coal stockpiles and slowing growth of power demand in China and India also contributed to the reduction in coal and LNG imports in China and India this year.
India forced its gas-based power stations to run last year in order to meet the high demand for electricity as temperatures rose.
Gas-fired electricity is more expensive and less competitive this year with other power sources, such as solar, because of lower demand. Prashant Vashisth said, Vice President at Moody's affiliated ICRA.
The data shows that the total electricity production in May was down 5.3% on an annual basis to 160.4 billions kWh. The highest peak demand is also about 8% less than it was last year at 231 gigawatts, which officials attributed to the milder temperatures.
The peak demand, a measure for the maximum amount of electricity required at any time, reached 250 GW in May 2024 during a heatwave.
Renewable energy production surged in May to a new record of 24.7 billion kWh, an increase of 17.2% over a year ago. Its share in the total power mix increased to 15.4%, the highest level since records began.
Grid India data shows that the share of coal in India’s power mix fell to 70.7% last month, from 74.0% the year before and its lowest level since June 20,22.
The data revealed that hydropower generation increased by 8.3%, to 14.5 billionkWh, and now accounts for 9.0% total generation, compared to 7.9% of the total in May 2024.
The natural gas-fired electricity generation dropped 46.5% per year to 2.78 billion kWh, the largest decline since October 20,22.
(source: Reuters)
