Capacity utilisation and electricity generation by gas-based power plants, with 23.64 gigawatts (GW) capacity under operation, was the second highest on record during the April-June quarter in the current financial year.
During Q1 FY25, gas-based plants achieved a capacity utilisation rate, or plant load factor (PLF), of 25.8 per cent generating 13,338.23 million units (MU) on a provisional basis marking the second highest PLF since Q1 FY21.
In April-June of the Covid-impacted FY21, such power plants recorded a PLF of 28.6 per cent and produced 14,961.55 MU of electricity.
Rising Contribution
Increased production by gas-based power plants also pushed up the gas contribution in India’s power generation mix. The share rose from 2 per cent in June 2023 to 2.8 per cent in June 2024 due to implementing Section 11 of the Electricity Act, 2003, Crisil Market Intelligence & Analytics said.
In May this year, gas-based power plants achieved a PLF of 28.7 per cent generating 5,053.41 MU of electricity, the third highest on record.
Previously, such plants had recorded a capacity utilisation of 29.4 per cent in June 2020 and 28.9 per cent in May 2020. Power generation during these two months was 5,152.01 MU and 5,060.24 MU, respectively.
The world’s fourth largest LNG importer consumed 97.01 million standard cubic meters per day (MSCMD) of natural gas in Q1 FY25, up 53 per cent y-o-y. The consumption is the third highest on record after 104.78 MSCMD in Q1 FY21 and 98.51 MSCMD in Q1 FY19.
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 of natural gas. India’s peak power demand in 2023 rose to a record 240 GW in September.
In FY25, the power demand has been rising significantly aided by record high temperatures and heat waves. Peak power demand has already hit a record 250 GW in May 2024 and is expected to reach 260 GW by September 2024. This will push up the contribution of gas-based power plants as well.
The International Energy Agency has revised upwards the growth rate in India’s gas demand to 8.5 per cent from 7 per cent y-o-y in the 2024 calendar year. Similarly, the Gas Exporting Countries Forum (GCEF) predicts usage will grow at 6 per cent y-o-y.
Increased gas consumption for power generation is among the reasons fuelling the growth.
Exchange prices
In line with the year-on-year increase in power demand, volumes traded in the short-term power market rose by 19 per cent y-o-y in June, Crisil said.
“Real-time market (RTM) volumes surged by 20 per cent, indicating the need for immediate delivery during periods of sudden high power requirement. Interestingly, RTM volume share on the Indian Energy Exchange (IEX) increased to 30 per cent in June compared to the average of 23 per cent since its inception in June 2020,” it added.
Despite the surge in volumes traded, the price increase was limited to 8 per cent Y-o-Y in the north due to the increase in supply from coal and gas plants
Due to the unusually high temperatures in the north during the second and third weeks of June, prices frequently reached the peak price of ₹10 per kWh, with the average MCP reaching ₹5 per kWh compared to ₹4.7 per kWh in May when peak demand reached an all-time high, Crisil pointed out.
Indian Gas Exchange (IGX) reported a total trading volume of 11.7 million mBtu during Q1 FY25, a growth of 35 per cent q-o-q and 176 per cent y-o-y.
GIXI (Gas Index of India) for June 2024 stood at ₹1,068, or $12.8 per mBtu, an increase of 25 per cent from last month.
International gas benchmark prices recorded were: HH at around $2.8 per mBtu (up by 17 per cent M-o-M), and TTF at around $11 (up by 9 per cent M-o-M). LNG benchmark indices, West India Marker (WIM) stood at around $12 per mBtu (up by 11 per cent M-o-M).