+
ICRA forecasts a growth of 5-5.5% in the total power demand for FY24
COAL & MINING

ICRA forecasts a growth of 5-5.5% in the total power demand for FY24

ICRA, a leading ratings agency, anticipates a growth rate of 5-5.5% in electricity demand for the fiscal year 2023-24. This projection is lower than the robust demand growth of 9.6% witnessed in the previous fiscal year. The lower growth is attributed to unseasonal rains impacting consumption during the summer months. Despite being slightly below the expected gross domestic product growth rate of 6%, the projected demand growth remains higher than the historical average over the past decade. ICRA also notes that the possibility of El Nino in FY24 may positively influence electricity demand.

The previous fiscal year experienced a surge in demand due to a severe heat-wave, a favourable base, and an economic recovery. ICRA predicts that sustained demand growth will enhance the prospects of signing new power purchase agreements for thermal independent power producers. The agency also forecasts an improvement in the all-India thermal plant load factor from 64.2% in the previous fiscal year to 65.1% in the ongoing financial year.

In FY23, average spot power tariffs in the day ahead market of the Indian Energy Exchange remained high at Rs 5.9/unit. This was primarily due to substantial demand growth, constraints in coal supply, and elevated open market coal prices. While prices are expected to moderate in FY24 with improved coal supply and a moderation in demand growth, tariffs are still projected to remain higher at Rs 4.5/unit compared to the long-term average of Rs 3-3.5/unit. Furthermore, the coal stock level for domestic power plants stands at a satisfactory 13 days as of May 15, 2023, compared to 8 days during the same period in the previous year.

ICRA, a leading ratings agency, anticipates a growth rate of 5-5.5% in electricity demand for the fiscal year 2023-24. This projection is lower than the robust demand growth of 9.6% witnessed in the previous fiscal year. The lower growth is attributed to unseasonal rains impacting consumption during the summer months. Despite being slightly below the expected gross domestic product growth rate of 6%, the projected demand growth remains higher than the historical average over the past decade. ICRA also notes that the possibility of El Nino in FY24 may positively influence electricity demand. The previous fiscal year experienced a surge in demand due to a severe heat-wave, a favourable base, and an economic recovery. ICRA predicts that sustained demand growth will enhance the prospects of signing new power purchase agreements for thermal independent power producers. The agency also forecasts an improvement in the all-India thermal plant load factor from 64.2% in the previous fiscal year to 65.1% in the ongoing financial year. In FY23, average spot power tariffs in the day ahead market of the Indian Energy Exchange remained high at Rs 5.9/unit. This was primarily due to substantial demand growth, constraints in coal supply, and elevated open market coal prices. While prices are expected to moderate in FY24 with improved coal supply and a moderation in demand growth, tariffs are still projected to remain higher at Rs 4.5/unit compared to the long-term average of Rs 3-3.5/unit. Furthermore, the coal stock level for domestic power plants stands at a satisfactory 13 days as of May 15, 2023, compared to 8 days during the same period in the previous year.

Related Stories

Gold Stories

Next Story
Real Estate

We engineer the way architecture gets built

DALBIR SINGH, Founder, HAACE, on the company’s bespoke approach to translating ambitious architecture into precisely engineered and executed structures.What does bespoke construction mean to HAACE, and how is it different from conventional contracting?For HAACE, bespoke construction means choosing the construction methodology around the design rather than forcing the design into a standard template. Every project is studied around its architectural intent, structural requirements and execution challenges. We deliberately take on a limited number of projects because this approach demands atte..

Next Story
Real Estate

Kamdhenu Realities acquires 4-acre Navi Mumbai land parcel

Kamdhenu Realities has acquired a 4-acre land parcel from RPG Life Sciences on Thane-Belapur Road for approximately Rs 1.5 billion, expanding its commercial real estate portfolio in Navi Mumbai.The parcel has a total developable potential of 1.8 million sq ft, on which Kamdhenu plans to develop a destination-scale commercial and lifestyle ecosystem. The proposed development will combine corporate office suites with high-street retail, F&B outlets, double-height lobbies, business infrastructure and lifestyle amenities.Located close to IKEA and opposite the upcoming Pawane Railway Station, t..

Next Story
Infrastructure Transport

97 Per Cent Of Rongjeng-Mangsang-Adokgre Road Nears Completion

Deputy Chief Minister in-charge of public works Prestone Tynsong said in Shillong on 26 August that 97 per cent physical progress had been achieved on the ongoing Rongjeng-Mangsang-Adokgre road being constructed under the Non-Lapsable Central Pool of Resources (NLCPR). He noted the project was sanctioned in 2017 and that the stipulated time for completion had been 24 months from issue of the final work order. The deputy chief minister informed the assembly that the government had decided to include the remaining work under a World Bank project. In reply to a query from Rongjeng MLA Jim M Sangm..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code