By Saurabh Chaturvedi

May 9, 2023 - India's coal-fired power generation has come under pressure as unseasonal rainfall during the ongoing summer has curtailed electricity consumption with some weakness in cooling demand over the last few weeks.

Coal-fired generation, which accounts for the bulk of India's power generation, edged lower to 21.5TWh during 1-7 May from 24.10TWh during the same period a year earlier, according to data from the Central Electricity Authority (CEA). It also eased to 127.45TWh during 1 April-7 May from 129.70TWh a year earlier, the data show.

Unexpected rains in parts of the country kept summer temperatures in check, likely weighing on air conditioning usage and overall cooling demand, which is typically higher around this time of the year. Peak power demand was around 176GW as of 7 May, after touching a high of about 216GW on April 18, according to CEA data. Peak demand was also weaker than the Indian power ministry's forecast of 229GW for April, owing to rains and thunderstorms in parts of the country. Maximum temperatures were below normal by 2-4°C in most parts of the country on 8 May, according to the latest data from the India Meteorological Department (IMD). IMD also issued warning of a cyclone developing in Bay of Bengal, which could bring heavy showers to eastern parts of the country.

The unexpected rains and uncertainty over the weather and electricity consumption outlook are curtailing Indian demand for seaborne cargoes, at a time when domestic coal availability has increased with higher production by state-controlled Coal India (CIL), which meets more than 80pc of India's coal needs. CIL produced 57.6mn t of coal in April, up by 7.7pc or 4.10mn t from a year earlier.

Meanwhile, Indian thermal coal imports fell in March, snapping a 10-month streak that saw them consistently rise on the year. Imports fell by 3mn t on the year to 13.19mn t last month, according to shipbroker Interocean.

But the country's hydropower output has been subdued since April, underscoring that rains have been patchy and not uniformly spread across India, with some parts of India witnessing upticks in temperatures. Weaker hydropower output increases the reliance on coal-fired generation.

Heatwaves

Heatwave conditions are likely to prevail in parts of West Bengal, the IMD said. It forecast maximum temperatures rising by 3-5°C over most parts of the country during the next five days.

Increase in temperatures could buoy power consumption and coal burn at utilities, supporting coal demand. Indian power demand could also rise in coming months because of forecasts of [potential El Nino weather conditions](https://direct.argusmedia.com/newsandanalysis/article/2442364) which could exacerbate hot weather.

Delhi has outlined a plan to raise domestic output and meet bulk of the power sector requirements. India aims to increase coal production by 13pc from a year earlier in the April 2023-March 2024 fiscal year to 1.012mn t.