India Set to Have First Power Surplus in 8 Yrs
India forecasts an electricity surplus for the first time in at least eight years because of transmission improvements and more generation. The country may have 1.1 percent excess electricity supplies in the year ending March 2017, according to the power ministry’s Central Electricity Authority. A 2.6 percent surplus for the period is forecast for peak periods, when daily demand is highest. India’s power deficit shrank to below 1 percent in May. The narrowing gap masks unfulfilled demand in a country where one in five citizens don’t have access to electricity and a market for back-up power thrives because of unreliable supplies. Prime Minister Narendra Modi’s plan to light up every household by 2019 and boost manufacturing in the country are expected to help lift electricity demand. Power generation growth has risen to 9.5 per cent this year so far, as against 5.65 per cent during the 10-year period from 2004 to 2014, Power Minister Piyush Goyal said. The power generation growth was recorded at 5.65 per cent between 2004 to 2014, 5.02 per cent in 2012-14, 7.03 per cent in 2014-16 and 9.5 per cent in 2016-till date, Goyal tweeted. Goyal also said there was 87 per cent reduction in energy shortage in just two years to 14 million units (mu), from 110 million units earlier. According to Vidyut Pravah application to monitor power demand on the basis of data provided by states, the electricity deficit came down to 14 mu in July this year from 110 mu in the same month in 2014 and 62 mu in 2015.
Goyal also tweeted that power was available at rates below Rs 2 per unit at exchanges across the country with no network congestion. “This reflects country moving towards One nation, One grid, One price,” he said.
“The overall surplus estimation, while skewed due to the position in Western region, demonstrates the progress India has made in resolving fuel and power generation issues,” said Sambitosh Mohapatra, a partner at PWC India. “As the economy grows, financials of state utilities improve and rural electrification progresses, the surplus will get absorbed.”
Though supplies may surpass demand at a national level several parts of the country may continue to face shortages, according to the Central Electricity Authority. Part of the reason is that money-losing state distributors curtail power purchases and resort to blackouts. A plan to restructure their debt and make them profitable is underway.
Power demand during the current fiscal year is expected to grow 9 percent to 1.21 trillion kilowatt hours, while supplies are expected to rise almost 13 percent to 1.23 trillion kilowatt hours, according to the Central Electricity Authority. India, home to a sixth of the world’s population, accounts for about 6 percent of global energy use.
Meanwhile, terming India as a “promising and demanding” market for renewable energy, Suzlon group Chairman Tulsi Tanti said government has a target of 175 GW of renewable energy by 2022, of which 60 GW is wind power. “Indian market will continue to grow by 30 per cent,” he noted, adding that to achieve such a huge target, the industry needs technology upgradation to counter lower tariffs and at the same time, grow generation capacity at a competitive cost. Explaining the rationale, he said: “Now the best sites are exhausted and we need to utilise low wind sites. We need to keep in mind the declining tariff. PPA tariffs are going below Rs 5. Because of these two challenges, it is important for us to invest in technology to make projects viable.”