India's Power Demand Set to Surge 7% in 2023-24: Fitch Report

The report highlights that this sustained power demand is expected to maintain the average thermal power plant load factor (PLF) above 60 percent.

November 18, 2023. By News Bureau

In a recent report, Fitch Ratings anticipates a substantial 7 percent year-on-year surge in India's domestic power demand for the fiscal year 2023-24. This surge, fueled by robust industrial activity, follows a notable 7.1 percent rise in the first half of FY'24. The projected demand rise is slightly lower than the 9.5 percent increase witnessed in the previous fiscal year, FY'23.

The report highlights that this sustained power demand is expected to maintain the average thermal power plant load factor (PLF) above 60 percent. “The strong power demand should keep the average thermal power plant load factor (PLF) above 60 percent," the report noted.

Fitch Ratings also expressed optimism for India's renewable energy landscape, foreseeing the role of cost-effective storage capacity and emerging technologies in supporting the country's ambitious long-term energy transition objectives.

The ratings agency notes the implementation of various schemes aimed at boosting renewable energy capacity addition, with recent changes to wind capacity auctions expected to foster better project execution by curbing aggressive bidding.

In the first half of FY24, India successfully added over 6.6 GW of renewable power generation capacity. Notably, solar capacity led the way with 5.0 GW, while wind power additions remained steady at 1.6 GW.

With an eye on the future, India aims to have non-fossil sources account for half of the installed generation capacity by 2030, up from 41 percent as of September 2023. To achieve this goal, the government plans to conduct auctions for 50 GW of renewable energy capacity annually, with a minimum of 10 GW dedicated to wind energy, spanning the fiscal years 2024 to 2028.

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