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Growing demand seen leading to power shortage in 4 years: Analysts

The gamut of steps to improve electricity access might lead to a supply shortage scenario after FY23, warranting ‘an immediate need to restart the capex cycle in generation’, according to analysts. “Our existing capacity and pipeline can at best meet projected peak demand till FY23, post which we will start running peak deficit,” ICICI Securities said. Peak power demand of the country breached the 180 giga-watt (GW) mark in October, 9.8% higher than the highest requirement recorded in FY18. Peak power demand have been increasing at a compound annual growth rate of 2.6% between FY15 and FY18. The rise in power demand coincides with the rampant addition of household connection under the government’s Saubhagya scheme and the reduction in the average duration of power cuts. “Assuming we intend to maintain 5% reserve margin, India’s peak demand will catch up with the available peak supply by FY21,” an analyst said. With the average availability factor of coal and nuclear power plants being around 70%, ‘only about 55% of India’s current installed capacity is ‘available’ to meet its peak demand reliably’, the ICICI note added.

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