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In FY 2024, India’s demand for power is anticipated to see a 7% YoY growth, following a 7.1% increase in the first half of the current fiscal year, primarily driven by robust industrial activity, as per the Fitch report.
Power consumption had witnessed a 9.5% rise in the previous fiscal year. The report highlights strong power demand is expected to maintain the average thermal power plant load factor (PLF) above 60%. Over the past three months, power demand has consistently increased by around 20% each month compared to the same period in the previous fiscal year.
Despite government efforts in the last six months to ensure sufficient coal stock through increased local supply and higher imports, the report indicates a decline in thermal coal inventory. As of the end of September, the inventory was adequate for only 8.4 days, as opposed to the usual 18 days.
To meet the growing demand, power ministry has mandated a 6% blending of imported coal until March 2024 and instructed all coal-based power plants using imported coal to operate at full capacity until the end of this financial year.
The report also observes a positive trend in reducing total dues from distribution companies (discoms) to power generation companies (gencos) due to regular payments under the central government’s late payment surcharge (LPS) rules. The total dues have decreased from ₹1.3 trillion in June 2022 to around ₹70,000 crore.
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