India’s hydropower generation is facing a significant setback due to the delayed monsoon and low reservoir levels, potentially impacting power supply during the peak demand season. The situation is exacerbated by El Nino’s influence, causing patchy rainfall and a prolonged dry spell, resulting in lower water storage in key reservoirs.
As India braces for a potential heatwave, the government has ordered all gas-based power plants to be operational from May 1 to June 30 to meet the anticipated increase in power demand. The move aims to avoid a repeat of last September’s record high demand of 243 gigawatts, which is projected to reach 260GW this summer. Despite the growing concerns over climate change, India’s National Electricity Plan estimates a surge in domestic coal consumption and production in the coming years.
The Ministry of Power has clarified that coal-based thermal plants can use linkage coal to offer surplus power in the power market. This move aims to optimize the utilization of generating stations as India anticipates a hotter-than-normal summer with a record peak demand of 260 GW. The clarification enables thermal power plants to sell surplus electricity generated using linkage coal in the power exchange. The Ministry has also instructed imported coal-based thermal power plants to operate at full capacity until October 15, and idling gas-based thermal plants to remain operational from May until the end of June.
Artificial Intelligence (AI) data centers are expected to contribute to a significant increase in natural gas demand in the second half of the decade. According to a report from Tudor Pickering Holt & Co, an additional 8.5 billion cubic feet of natural gas per day may be required to meet the growing power needs of AI data centers. This increased demand could have a positive impact on pipeline operators and gas producers.
