India’s peak power demand hits record high amid heatwaves, spurring gas demand

India's peak power demand hit a record high on May 21, as temperatures soared across the country, spurring expectations of increased gas demand, sources said over May 21-22.

The country's peak power demand hit a record high of 270.82 GW on May 21, marking the fourth consecutive daily record, India's Ministry of Power said in a social media post on that day, with the surge reflecting the impact of severe heatwaves across the country.

"The surge in demand appears to be linked to the greater usage of cooling appliances in view of the prevailing weather conditions across the country," the Ministry said on X, formerly known as Twitter.

According to the Ministry, the peak demand on May 21 was met by a mix comprising thermal (62.8%), solar (22.0%), wind (5.0%), hydro (5.8%), and the rest from other sources.

"The availability of coal at the thermal power plants is adequate, and the supplies are being effectively monitored," the Ministry added.

The peak power demand for the country has been gradually growing. On May 20, it stood at 265.44 GW, and on May 19, at 260.45 GW, the Ministry had shared in earlier posts on X.

Quenching power thirst

"The power sector has been consuming strong volumes due to the heat wave, and peak load is increasing," an LNG importer source said.

"The incremental consumption has been around 8 mmscm/d, which implies overall [gas] consumption was above 10 mmscm/d," he added.

A second industry source echoed a similar sentiment, noting that the severe heat was driving up gas demand.

"Generally, the gas supply for power generation rises during the evening and the night to maintain the grid during peak hours," a gas marketer said.

"Since the consumption for gas-based power is not throughout the day, the number for consumption could be near 20 mmscm/d," he added.

A Singapore-based trader highlighted the need for additional gas supplies due to expectations of soaring temperatures.

"If the pace of consumption maintains for a week, that is nearly one and a half additional cargoes that India would need," the trader said.

A heat wave warning bulletin by the India Meteorological Department (IMD) on May 21 stated that heatwaves or severe heat wave conditions have prevailed in many parts of various states across the country.

Above-normal temperatures were recorded at many places across Northwest and Northeast India, and in many states, including Madhya Pradesh, Bihar, Chhattisgarh, West Bengal, Odisha, Andhra Pradesh, and Telangana, the IMD added.

Platts, part of S&P Global Energy, assessed the JKM, the benchmark price for LNG cargoes delivered to Northeast Asia, at $18.803/MMBtu for July on May 21, down $1.056/MMBtu day over day. It assessed the LNG West India Marker, or WIM, for July at $18.278/million British thermal units May 21, at a discount of 52.5 cents/MMBtu to the July JKM assessment.