India’s coal demand from power plants is set to rise by 11.5% in the April to June quarter amid the peak electricity demand season in the country in May and June, sources with knowledge of the matter told the Economic Times.
Demand from coal-fired power plants is expected to hit 233 million tons, while electricity generation at these plants is forecast to jump by 13.3% this quarter.
India is preparing to meet the surge in electricity demand during the peak consumption period in May and June. Weather forecasts at present point to above-normal temperatures and heat waves, which would further boost demand.
India, the world’s second-largest coal consumer and importer behind China, has enough coal supply to meet demand in the summer months, according to officials and analyst estimates.
Total coal inventories currently sit at a record high of 224 million tons, up from 201 million tons at the same time last year.
India’s Power Minister last month ordered coal-fired power plants to run at full capacity for three months starting April 1, to be prepared to meet peak power demand during the coming summer.
India is expected to see peak summer demand of 270 gigawatts (GW) this year, which would beat the previous record-high demand of 250 GW from May 2024.
More coal consumption is also set to replace the loss of some natural gas-fired capacity amid soaring international gas prices in recent weeks.
The country slashed gas supply to industry in early March, following the war in the Middle East and Qatar’s force majeure on LNG deliveries after it stopped liquefaction and later its major LNG complex at Ras Laffan was hit by Iranian missiles.
Due to the lower natural gas supply, India is leaning on a higher share of renewables and its backup fuel for power generation—coal, which continues to deliver more than half of power output and will likely account for much more this summer.
By Tsvetana Paraskova for Oilprice.com
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