The plant load factor (PLF), or capacity utilisation, of gas-based power plants rose to 21.4 per cent in April 2024, a four-year high for the month, as the government mandated such plants to run at optimum capacity to meet India’s rising electricity consumption.

Gas-based power plants have an installed capacity of 24.8 gigawatts (GW) and account for around 2-3 per cent of India’s total power generation. They produced 3.7 billion units (BU) in April 2024. For comparison, coal-based power plants reported a PLF of 76.79 per cent in April.

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Pan-India electricity consumption rose almost 10 per cent year-on-year (y-o-y) to 153.77 BU during April 2024 witnessing a peak demand of 224 GW that was successfully met. Power deficit stood at 0.1 per cent.

The Power Ministry invoked Section 11 of the Electricity Act for gas-based units mandating them to run at optimum capacity during April-June 2024. Sources said such plants will continue to generate higher PLFs during the peak demand season.

Gas-based power

The capacity utilisation by gas-based power plants during April 2024 was almost equal to that reported in April 2021 at 21.5 per cent. Prior to April 2024, such units reported a record PLF of 27.6 per cent in April 2020.

However, the PLFs are still below pre-pandemic levels. In April 2019, gas-based plants reported a PLF of 24.3 per cent producing 4.18 BU energy.

The world’s fourth largest LNG importer consumed 27.27 million standard cubic meters per day (MSCMD) natural gas in April 2024.

In FY24, the PLF of gas-based plants rose to 14.8 per cent from 11.5 per cent in FY23. They produced 31.30 BU against a target of 32 BU, cumulatively consuming 235.78 MSCMD natural gas. India’s peak power demand in 2023 rose to a record 240 gigawatts (GW) in September 2023.

Other factors

Softening LNG prices and higher requirement of gas by the industrial and power sectors also pushed up the trade on gas exchanges.

For instance, Indian Gas Exchange (IGX) traded 2.47 million British thermal units (mBtu), or roughly 62 million standard cubic meters (MSCM), gas volume in April 2024, which was higher by 123 per cent month-on-month (m-o-m)and 38 per cent y-o-y.

Higher trade volumes were due to price corrections in the international market and lower price of imported LNG as compared to HPHT/Ceiling gas price. A total of 74 trades were executed in April with 22 trades (maximum) executed in daily contracts, followed by 19 in fortnightly and 18 in monthly contracts.

GIXI (Gas Index of India) for April 2024 was ₹754 or $9 per mBtu, lower by 6 per cent from March 2024. Henry Hub reported a price of around $1.6 per mBtu, while TTF was at around $9.2 and the West India Marker (WIM) at $9.7 per mBtu.

Gas shines as power demand rises

Recently, India Ratings & Research (Ind-Ra) projected that gas-based power plants generation could improve intermittently during peak power demand in FY25, led by the stabilisation of gas prices.

International Energy Agency projects India’s gas demand to grow 7 per cent y-o-y in 2024 calendar year, while Gas Exporting Countries Forum (GCEF) predicts usage to grow at 6 per cent y-o-y. Higher gas consumption for power generation is among the reasons fuelling the growth.

On May 30, India’s peak power demand met during the day rose to a record 250 GW as intense heat waves parched lands across north, northwestern and central India resulting in a higher requirement for cooling. On May 29, the demand had hit 246 GW.

This is higher than the government’s projection of 235 GW in April and 240 GW in June 2024.