India’spower demand to surge 7 percent in FY24: Fitch

Despite the surge there will be a restrained uptick in coal import, according to the Report.

In anticipation of a robust industrial landscape, Fitch Ratings projects a 7 percent surge in India’s power demand for FY24. The escalating demand is poised to maintain high load factors for thermal power plants, reaching 68.7 percent in the first seven months of FY24. Despite the surge, the report by Fitch
foresees a restrained uptick in coal imports, with augmented local supply shouldering a significant portion of the escalating demand. Declining coal inventories at power plants since August 2023, coinciding with a record monthly power demand, have prompted the government to bolster domestic coal production and permit a greater blend of imported coal in the fuel mix to safeguard sufficient coal stock.

To navigate long-term energy transition objectives, the cost-effective storage capacity and emerging technologies will play pivotal roles, according to the report. India has implemented various initiatives to amplify renewable energy capacity, with recent modifications in wind capacity auctions expected to curb aggressive bidding and enhance project execution. Solar power remains at the forefront of renewable capacity expansion, contributing 5.0GW out of the total 6.6GW added in the first half of FY24.

Fitch also forecasts an amelioration in the receivable position of generation companies in the short term, as distribution companies expedite clearing dues, spurred by the central government’s late payment surcharge rule. This positive trend is expected to bolster power sector in India.