India's Power Puzzle: How Cooler Weather Cut Demand to 123 Billion Units

This comes after a nearly 6 per cent on-month degrowth in October. "Among others, Madhya Pradesh logged an 11 per cent decline in demand due to severe cold wave conditions, while Rajasthan saw demand dip 7% due to cold weather," Crisil Intelligence said in its report.

Meanwhile, power generation increased marginally by 0.5 per cent year-over-year to 134 BUs in November.

Renewable energy (RE)-based generation is estimated to have increased by 17 per cent year-over-year, marking the eighth consecutive rise this fiscal year. This generation growth can be attributed to rising capacity additions.

Conversely, coal-based power generation declined for a second time this quarter. Consequently, coal accounted for 72 per cent of the total power output as compared to 75 per cent a year ago, highlighting the ease it offers in ramping production up or down in sync with power demand.

According to the report, as of November 30, thermal power plants had 54 million tonnes (MT) of coal and coal inventory stood at 18 days, compared with 14 days in the same month a year ago. This increase in inventory comes amid off-take to the power sector declining 5.5 per cent on-year in November; it declined 3.17 per cent on-year from April-October.

This highlights the lower demand for thermal coal from the power sector due to expansion in RE generation, the report added.

Despite the decline, power demand is expected to track economic growth this fiscal.

"We estimate power demand will increase 1-3 per cent on-year this fiscal to 1,715-1,725 BU, sustained by steady economic performance and increasing disposable income," the report stated.

Vagaries of the weather will likely limit power demand growth. The economy is forecast to maintain its 7 per cent gross domestic product growth rate in the fiscal year, the report noted.

- IANS