Decline in Industrial Activity Drives Lower Power Output in India

Electricity generation in India declined last month amid weaker industrial activity and mild weather. This was the second monthly decline in output in a row, Reuters noted in a report citing official data.

Electricity generation in November stood at 134.26 billion kWh, which was down 1% on October. In October, the monthly decline in output from September came in at 6%, the data showed.

By source, coal generation was down by an annual 5.8% in November due to the lower demand. Low-carbon generation, on the other hand, was higher, by a robust 42% from a year earlier as capacity additions surged this year. Total output from low-carbon sources hit 18.55 billion kWh. Still, coal remains the biggest part of the subcontinent’s energy mix.

India has big plans for wind and solar capacity, especially the latter. In the first seven months of this year, the country boosted its total installed solar power capacity by 25.4 GW, which was a record high. The total wind and solar capacity target for 2030 is 500 GW.

The fast buildout in solar capacity has not been all positive, however. The surge in intermittent, weather-dependent generation has increased the risk of grid overload, so grid operators have started curtailing solar output during periods of low demand and high supply.

This has sparked worry about the economic viability of new solar projects, with the rate of output curtailment in some cases reaching as much as 48% of total output. According to the National Solar Energy Federation of India, solar generators have lost some $26 million in revenues because of curtailment since April.

An expansion of the country’s transmission network to accommodate more solar is also lagging behind the addition rate of solar installations, further complicating progress in non-hydrocarbon capacity.

By Charles Kennedy for Oilprice.com

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