India’s gas-based power plants, with an installed capacity of around 25 gigawatts (GW), consumed roughly 20 million metric cubic meters per day (MSCMD) of natural gas during April-June this year as India’s power demand rose significantly due to robust economic activity and a record summer heat driving up the demand for cooling.
“This year the summer was very harsh. Power demand picked up quite substantially. Lot of gas-based power plants were fired and gas consumption increased, I think, by around 20 MSCMD. This was consumed during the peak period, April to June, particularly in May and June. It normally is 4-5 MSCMD,” Petronet LNG MD & CEO AK Singh said.
Singh was speaking at a post-result interaction of the country’s largest liquefied natural gas (LNG) importer with the media on Wednesday.
The share of gas-based plants almost doubled to 3.1 per cent in India’s overall generation last month from 1.6 per cent a year-ago, Crisil Market Intelligence & Analytics has said.
“There was a substantial increase in gas consumption, particularly for the power sector. We did not face any issue in importing LNG to meet requirements for the power sector. We don’t foresee any issue next year,” Singh added.
He pointed out that prices were in the range of $9-11 per mBtu this year and since peaking power affordability of the domestic consumers is high, they are able to buy electricity even at ₹15-16 per unit. “When affordability of consumers to buy electricity at high prices is there, then LNG even at $10-12 per mBtu is quite a substitute fuel to meet requirement,” Singh explained.
Gas consumption
On gas consumption by the Power sector, he said “We can consume even 25 million tonnes (mt) of gas in the power sector itself if full 25,000 megawatt capacity is online. If prices are reasonable in 2026-27, India can take advantage of low prices, but infrastructure should be there. India is creating a robust infrastructure for gas.”
Earlier this month, the International Energy Agency (IEA) revised upwards the growth in India’s gas demand, from 7 per cent Y-o-Y earlier to 8.5 per cent.
“For the full year of 2024, India’s natural gas demand is expected to increase by 8.5 per cent (y-o-y), primarily driven by higher gas use in the power sector and in industry. Liquefied Natural Gas (LNG) imports into India are expected to increase by 17 per cent (y-o-y) in 2024,” it said in its Q3 2024 gas market report.
In the Q2 2024 report, the agency projected gas consumption to grow by 7 per cent on an annual basis. In the 2023 calendar year, the consumption stood at 60.12 billion cubic meters (BCM).
The world’s fourth largest importer of liquefied natural gas (LNG) consumed 66.63 BCM natural gas in FY24, compared to 59.97 BCM and 64.16 BCM in FY23 and FY22, respectively.