India’s power demand falls in March as rain brings some relief: CRISIL

India in March received a rainfall of 37.6 mm, which was the highest in the last three years, the Indian Meteorological Department (IMD) has said.

In January and February, the power demand increased 13.7 per cent and 10 per cent YoY, respectively, led by increased heating requirements in winter months and robust economic activity, the rating agency said in its report.

The agency added that the rising temperature and resilient economic activity in the current financial year are expected to keep power demand up.

“On average, the first quarter of the fiscal should see power demand grow 4% on-year on a high base of the previous year,” the report stated.

Even as base demand declined, India’s peak power demand in March remained afloat, as it rose 3 per cent to 209 GW, the agency said. Meanwhile, for Q4FY23, the growth was at 10 per cent, led by increased heating demand in the winter month of January.

In FY24, peak electricity demand is expected to touch a record high owing to the predictions of heat waves that will increase usage of air conditioners, fans, and refrigeration units, CRISIL said. It added that India’s peak power demand is expected to grow to 230 GW in the first quarter of fiscal 2024, rising 6.5 per cent YoY.

In March, the prices of power exchange fell 33 per cent YoY, while, in January and February, the rates increased 78 per cent and 45 per cent respectively, due to cold wave.

“However, despite the high base for March last year, the fourth quarter in fiscal 2023 saw a 13 per cent growth in the day-ahead market (DAM) prices over the same period a year ago,” CRISIL said.