India’s peak power demand set to jump by 10% this year

New Delhi: India should prepare for a 9 to 10 per cent growth in peak electricity demand this summer with the country expected to experience more heatwaves, warn experts.

Last year, the all-India peak electricity demand crossed 250 gigawatts (GW) on May 30, which was 6.3 per cent higher than projections. Climate change-induced heat stress is one of the key factors driving electricity demand.

Currently, industries, households and agriculture account for 33 per cent, 28 per cent and 19 per cent of India's total electricity consumption, respectively. Household electricity demand has grown the fastest over the past decade, according to Disha Agarwal, Senior Programme Lead – Renewables at the Delhi-based think tank Council on Energy, Environment and Water.

The share of household electricity consumption increased from 22 per cent in 2012-13 to 25 per cent in 2022-23. Much of this rise can be attributed to economic growth and the increasing need for cooling due to rising temperatures, experts say. In the summer of 2024, room air conditioner sales surged by 40 to 50 per cent year-on-year amid record-breaking temperatures, Agarwal said. "India must now brace for extended heatwaves and a peak electricity demand growth of 9-10 per cent. However, our analysis shows that this peak demand will only last for a short period," she added.

Agarwal said India's electricity consumption has been growing at about 9 per cent annually since 2020-21, compared to 5 per cent per year in the previous decade. The Central Electricity Authority (CEA) had estimated that electricity demand would grow at a rate of 6 per cent per year from 2022 to 2030. At the "Global Heat and Cooling Forum", organised by the Natural Resources Defense Council last week, experts raised concerns about the increasing demand for air conditioning as summer temperatures continue to rise.

Abhas Jha, Practice Manager, Infrastructure Resilience Policy and Finance for South Asia at the World Bank, said that under a moderate emissions scenario, the number of heatwaves in India is expected to triple.

"India is set to become the largest market for air conditioners globally. Every 15 seconds, an air conditioner is sold in India. AC penetration in the country is currently around 8 per cent compared to 90 per cent in developed nations," he said.

"AC penetration in India is going to increase. The problem is that most of these air conditioners are highly energy-inefficient -- three-star or unstarred, or unbranded ACs that consume a lot of energy. And if we continue on this trajectory, forget 1.5 degrees Celsius, even 2 degrees Celsius is off the table," Jha said. A few years ago, the International Energy Agency projected that energy demand from air conditioners would triple by 2050, equivalent to adding 10 new air conditioners every second for the next 30 years.