Power demand eases, reservoirs begin to fill as monsoon gains momentum

Heavy rain across swathes of India has crippled civic life, but the downpour has eased the pressure on power demand. Plentiful rains could also replenish water reservoirs, in a relief for hydropower generation and farmers requiring irrigation.

The southwest monsoon hit the Kerala coast and northeast India two days and six days earlier than the scheduled date on 30 May, but lost momentum after 9 June. It reached northwest India on time by 29 June, before unleashing Delhi's highest single-day June rainfall in 88 years. Mumbai was no different.

A record in May

Peak power demand hit a record 250 GW on 30 May and remained elevated through most of June; however, it has eased and has largely remained below the 220 GW mark in July. According to the latest data from the Grid Controller of India, on Thursday, the peak demand surpassed the 220 GW mark for the first time this month and stood at 221 GW. On 6 July, it fell below the 200 GW mark to reach 198 GW.

Falling temperature has reduced cooling demand that boosted consumption in May-June amid a prolonged heatwave across north and northwest India.

"Not just the cooling demand, the demand from agriculture sector in the form of use of heavy pumps for irrigation with underground water has also reduced. With the rains coming in farmers would be able to irrigate from canals and other overground sources, Further on the supply side, both wind and hydro power projects would have gained momentum," said Vikram V, vice-president & co-group head, corporate ratings, ICRA.

Reservoirs filling up

The Central Water Commission on 11 July said live storage in 150 reservoirs was 46.311 bcm (billion cubic metre), which is 26% of their total live storage capacity. However, this is still below 58.864 bcm at the same time last year, as well as the 10-year average of 51.724 bcm. The live storage in these reservoirs now stands at 79% of the live storage a year ago, and 90% of normal or 10-year average storage.

It remains to be seen how far rains replenish water reservoirs in the rest of monsoon.

"It is too early to comment on. The performance of agriculture and other key sectors like energy will depend on how monsoon rainfall is, and how it impacts water reservoirs for three months. Southwest monsoon ensures water for domestic use, animal consumption and agriculture by filling up water reservoirs for the entire year," said Madan Sabnavis, chief economist at Bank of Baroda.

Hydropower projects which are largely rainfed and based on reservoirs would benefit from recent rains. Last financial year, amid weak monsoons, hydropower generation failed to take off.

Adequate supply of coal

Despite steep demand, availability of coal at power plants has largely been adequate this year. Currently, domestic coal-based power plants have stocks for around 16.5 days of operations. Further on July 10, these domestic coal-based plants received 2.36 million tonne coal, about the same amount as what was required as per their consumption.

"Along with the effect of monsoon rains this year, due to a high base effect, India may witness a year-on-year decline in demand growth in the second and third quarter of FY25. The demand in the corresponding quarter of last fiscal was high due to delayed monsoons," Icra's Vikram said, adding demand in FY25 is expected to be around 6.5%.

Heavy rainfall likely in July

The India Meteorological Department (IMD) on 1 July said India could experience above-normal rainfall in July, with heavy rains potentially leading to floods in the western Himalayan states and river basins in the central parts of the country.

This is partly because the El Niño–Southern Oscillation (ENSO) has returned to neutral, and the cooler phase, known as La Niña, is expected to be formed in the second half (August-September) of the monsoon season.

La Niña, meaning “little girl”, is characterised by the cooling of sea surface temperatures in the same regions. It occurs every 3-5 years, and can occasionally happen in consecutive years, leading to increased rainfall and distinct weather patterns, resulting in floods.