IEA sees India power demand rising 6% in 2021

Coal Insights Bureau

Assuming a return to first quarterlevel growth in the second half of the year, power demand in India could grow by more than 6 percent in 2021 and by more than 8 percent in 2022, International Energy Agency said in its latest report.

In India, the third-largest electricity consuming country after China and the US, annual demand decline by 2.4 percent in 2020, with a low point in March, when demand fell by 23 percent year-on-year.

India’s per capita electricity consumption of slightly above 1 MWh per year is significantly below Asia Pacific region’s average of 3.3 MWh and shows potential for future growth, believes IEA.

After a strong consumption increase in the first quarter of 2021 compared with the previous year, demand fell significantly in April as Covid-19 cases surged.

Half of 2021 power demand rise to come from coal

Global electricity demand will rebound strongly in 2021 and 2022, predicts IEA in its latest Electricity Market Report.

After falling by around 1 percent in 2020, global electricity demand is set to grow by close to 5 percent in 2021 and by 4 percent in 2022.

The majority of these increases will take place in the Asia Pacific region. More than half of global growth in 2022 will occur in China, the world’s largest electricity consumer while India, the third-largest consumer, will account for 9 percent of global growth, IEA said.

In India, during the first quarter of 2021, weather-corrected electricity demand was almost 10 percent higher than in the same period in 2019.

The second wave of Covid-19 that hit India by mid-April 2021 slowed the pace of the growth: although electricity demand in April 2021 was still 7 percent higher than in April 2019, this was 3 percentage points below the growth in March.

In the first four weeks of May 2021, growth declined to close to 6 percent compared with 2019.

In spite of its severity, the second wave affected Indian electricity demand less than the first wave in 2020. After strict lockdown measures started mid-March 2020, power demand sustained a decrease of 25 percent (compared with 2019) for five consecutive weeks, from the end of March to early May.

Although India’s PV capacity additions in 2020 declined by almost 60 from 2019, we expect new expansion records in 2021 and 2022 as delayed projects from previous auctions are commissioned – if scheduled projects go ahead as planned despite the Covid-19 crises in the first half of 2021.

Weather-related electricity demand set to bounce back in 2021

In June and July 2021, extremely hot temperatures in several regions could result in a global increase in electricity demand for cooling, IEA said.

In British Columbia, Canada, a new heat record of 50 degrees Celsius was reached. Temperatures in several cities in the northwest of the US reached new all-time highs. In the Middle East, several countries registered more than 50 °C.

In Asia Pacific, the first five months of 2021 have been milder on average, slightly reducing electricity demand for heating. In India, a heat wave in the early summer months increased the need for cooling.