On October 9, 2024, it was reported that India's coal-fired power generation fell for the second consecutive month in September, reflecting a significant shift in energy consumption patterns in the country. This decline is attributed to a combination of slower electricity demand growth and a notable increase in solar energy production, according to data from the federal grid regulator, Grid-India.
The total power generated from coal and lignite plants dropped by 5.8% year-on-year in September, following a 4.9% decline in August. This marks a stark contrast to the previous 47 months of continuous growth in coal usage for power generation. Analysts suggest that the recent heavy rainfall during the monsoon season has reduced air-conditioning needs, contributing to lower power consumption.
During the September quarter, electricity demand grew merely 1.1% year-on-year, a significant decrease compared to the 9.7% growth observed in the first half of the year. The increase in solar power generation, which surged by 26.4% annually in September, has pushed renewable energy's share in India's electricity output to a record high of 13.9% for the quarter. Additionally, hydropower generation experienced over 26% growth, aided by favorable rainfall conditions.
As a result of reduced coal dependency, coal imports fell by 6.1% in September, marking the steepest decline in a year. Coal India, the largest coal producer in the country, also reported a significant drop in production and supply during the September quarter, the fastest since mid-2020.
Despite these shifts, industry experts anticipate that economic growth will drive an increase in power demand, with predictions of an 8% rise in 2024 compared to 6.5% in 2023, largely fueled by industrial expansion and overall economic activity.
This development highlights India's transition towards a more sustainable energy model, balancing the need for reliable electricity with environmental considerations.
Source: Reuters, October 9, 2024.