Peak power demand increased at a compound annual growth rate of just 2.6% between FY15 and FY18.

Peak power demand of the country breached the 180 gigawatt (GW) mark in October — the first time in history — marking the reversal of the trend of tepid growth in energy demand since FY15 and signalling a spurt in industrial activity. The month’s peak demand of 180.4 GW was 9.8% higher than the highest level recorded in FY18.

Peak power demand increased at a compound annual growth rate of just 2.6% between FY15 and FY18.

At the same time, the electricity consumed in the country in October was 115.6 billion units (BUs), 14% higher than the corresponding month last year. To put this in perspective, the year-on-year rise in electricity requirement in October 2017 was only 3%.

Energy consumed in Telangana this October was up 42% from the year-ago month. Other major states registering high growth in consumption were: Karnataka (31%), Andhra Pradesh (27%), Maharashtra (27%), Odisha (26%), Chhattisgarh (22%), Madhya Pradesh (19%), Gujarat (17%) and Bihar (16%).

The rise in power demand coincides with the rampant addition of household connections under the government’s Saubhagya scheme. Apart from a pick-up in industrial production, reduction in the average duration of power cuts also played a role.

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“The y-o-y peak demand has been robust across months in (October), which means that the change is structural and not seasonal,” noted analysts at ICICI Securities said.

More than 2 crore households have been connected under the Saubhagya scheme since its launch in October 2017. The all-India average duration of power cuts was 7 hours and 8 minutes in October this year, 1 hour 5 minutes shorter than the same month last year.

The rise in demand is a good news for independent power producers, with about 20,000 MW generation capacity stranded due to the lack of power purchase agreements. However, the issue of coal supply shortage is seen to amplify.

As recently reported by FE, states such as Bihar, Jharkhand, Uttar Pradesh and Chhattisgarh, which have taken up the central government’s 100% household electrification target at the fastest rate have reported very high aggregate technical and commercial (AT&C) losses at the end of September.