{"id":10950,"date":"2024-06-06T10:08:44","date_gmt":"2024-06-06T10:08:44","guid":{"rendered":"https:\/\/roydadnaft.ir\/English\/?p=10950"},"modified":"2024-06-06T10:08:44","modified_gmt":"2024-06-06T10:08:44","slug":"scorching-heat-drives-indias-gas-fired-power-use-to-multi-year-highs-in-may","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/10950\/","title":{"rendered":"Scorching heat drives India’s gas-fired power use to multi-year highs in May"},"content":{"rendered":"

RoydadNaft – <\/a><\/span>\u00a0Sweltering heat and policy measures are fueling a surge in the use of gas-fired power in India, with imports of liquefied natural gas (LNG) forecast to rise sharply over the next two years, industry officials and experts say.<\/p>\n

The country\u2019s gas-fired power generation doubled in April and May to 8.9 billion kilowatt-hours (kWh) compared with the same period last year, data from Grid India showed, eating into the share of coal-fueled electricity for the first time since the COVID-19 pandemic.<\/p>\n

More than 75 percent of India\u2019s power generation was from coal in 2023, while gas-fired plants have accounted for only about 2 percent in recent years, largely because of the high cost of gas relative to coal.<\/p>\n

In May, coal\u2019s share dipped to 74 percent, compared with 75.2 percent during the same month last year, while gas\u2019s share nearly doubled to 3.1 percent from 1.6 percent.<\/p>\n

An emergency clause invoked to force operation of idle gas-fired power plants to avoid power cuts during the 43-day federal elections that ended last week also drove gas usage, industry officials said, as power outages have historically been a key electoral issue.<\/p>\n

\u201cThe current growth of Indian power demand suggests the rising need for greater availability (of natural gas) and flexibility will remain a fixture in coming years,\u201d said Joachim Moxon, LNG analyst at ICIS.<\/p>\n

LNG imports to rise<\/h3>\n

India\u2019s gas-fired power output is expected to grow by 10.5 percent in the fiscal year ending in March 2025, following 35 percent growth the prior year.<\/p>\n

To meet that demand, LNG imports by the price-sensitive buyer swelled in May to the highest levels since October 2020, data from analytics firms LSEG and Kpler showed, despite global prices up five-fold from the pandemic-hit lows of 2020.<\/p>\n

Demand for LNG in India, the world\u2019s fourth-largest importer of the fuel, is set to increase by 19 percent in 2024, with imports forecast to reach more than 28 million metric tons in 2025, up from 22.1 million tons in 2023, according to ICIS.<\/p>\n

\u201cIndia\u2019s LNG imports will continue to be driven higher by the power sector in at least the next two years,\u201d said Victor Vanya, director at Indian power analytics firm EMA Solutions.<\/p>\n

Industry officials and analysts have argued allocating more domestically produced gas could allow gas-fired generation to better compete with coal, but most local gas has gone to other sectors in recent years.<\/p>\n

\u201cThe insufficient local gas output is increasingly being used to supply the city gas network and fertilizer companies, and power generators will have to import,\u201d said a senior executive at a large Indian gas exchange who declined to be named because he was not authorized to speak to media.<\/p>\n

Despite being cheaper, solar and wind are harder to control and forecast than gas, while coal and nuclear power cannot be ramped up or down as quickly in response to sudden demand spurts or dips.<\/p>\n

Gas\u2019s flexibility and a 2022 federal regulation that provided a policy framework for operating more expensive gas-fired power plants have helped boost the fuel\u2019s use, industry officials and experts said.<\/p>\n

\u201cUntil we have optimal, large-scale battery storage solutions in India, peaking requirements such as ramping up and ramping down quickly will be met by thermal sources including natural gas,\u201d said Sadek Wahba, managing partner at Miami-based private equity firm I Squared Capital, which has invested billions of dollars in natural gas and renewables in India.<\/p>\n

Updated on