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September 29, 2021

Sector Vector: Reading the topical trends: Coal supplies come up short as power demand rebounds

Feedstock inventory may not rise beyond 10 days on average through March

 

The surge in electricity demand

 

Power demand has seen a robust recovery after the second wave of Covid-19. As of August this fiscal, it was up ~16% on-year and ~3% over the corresponding period of fiscal 2020, or the pre-pandemic level.

 

Peak demand also spurted sharply, especially over June-August, led by staggered rainfall, peaking temperature, and the recovering economy. In July, peak demand crossed a record 200 GW.

 

Peak demand is an important metric, along with rising base demand, as it is instantaneous and requires coal plants to quickly ramp up over a short period. In order to meet peak demand, thermal power plants need adequate coal stocks to quickly ramp up utilisation levels.