Slowing electricity demand, renewable competition undercutting coal in India

first_img FacebookTwitterLinkedInEmailPrint分享Reuters:A sharp plunge in India’s electricity demand in October has been matched by falling coal imports, but weakness in vehicle sales and fuel demand hasn’t yet showed up in crude oil imports. Power demand in Asia’s third-largest economy slumped 13.2% in October from a year earlier, the steepest monthly decline in more than 12 years, according to government data.Coal imports fell to 14.7 million tonnes in October, the lowest since January and the third straight month of declines, according to vessel-tracking and port data compiled by Refinitiv Imports were also down 16.9% from the 17.7 million tonnes recorded in October last year, a further sign that India’s coal demand is softening in the face of slower economic growth.It’s also not the case that imports are being replaced by higher domestic output. In fact, the opposite is happening, with state-owned Coal India well behind its production target so far this fiscal year. The world’s largest coal mining company did manage to increase output in October from September’s six-year low, but the 39.35 million tonnes produced was still down 20.9% from the same month last year, according to data on the company’s website. In the first seven months of the fiscal year that started in April, Coal India has produced 280.36 million tonnes, down 8.5% from the same period last year.The weakness in both coal imports and domestic coal output is not only a reflection of slowing industrial power demand, but also of how renewable energy is making increasing inroads into India’s generation mix.India’s thermal coal use over the seven months to end-October was steady on a year earlier, compared with average annual growth of 6.3% over the past 12 years, the Institute for Energy Economics and Financial Analysis (IEEFA) said in a report released earlier this month. And coal generation actually fell by 12,500 gigawatt hours (GWh) in the first seven months of the fiscal year, compared with the same period last year, IEEFA said. In the meantime, generation from all non-coal sources, which include solar, hydro, wind and natural gas, rose by 24,000 GWh, or 8.4%, over the same period, the report said.Given that renewables are increasingly cost competitive against existing coal-fired generation, it’s likely that India’s electricity growth will continue to be dominated by solar and wind.More: India’s economic woes hit coal imports, but crude oil soldiers on for now: Russell Slowing electricity demand, renewable competition undercutting coal in Indialast_img read more