NEW DELHI/BENGALURU, April 1 (Reuters) - India's electricity generation rose in March at its fastest pace in three months, government data showed, as increased use of air-conditioning in hotter weather and the return of employees to offices led to an increase of 5.99% in output.
Demand could surge further heading into summer, after weather officials forecast maximum temperatures above normal in April in most parts of the northwest, northeast and central regions.
States in these regions such as Madhya Pradesh, Punjab, Rajasthan, Jharkhand, Uttar Pradesh, Maharashtra and Meghalaya recorded the highest power demand growth rates in March, a Reuters analysis of government data showed.
The higher demand had already forced a cut in coal supplies to the non-power sector, with plans for some fuel auctions mothballed. read more
Output from coal-fired utilities, which fuel nearly three-quarters of power production, grew about 3% in March. Renewables such as wind and solar helped to meet the higher demand in March, with output from green sources growing 22.2%, the fastest in seven months.
Generation by hydro and nuclear energy sources grew at the fastest pace in at least 27 months, the data showed, making up for a steep fall in natural-gas fired generation.
State-run Coal India Ltd (COAL.NS), which accounts for more than 80% of domestic output of coal, saw its output and supplies surging to record highs during the year that ended on March 31.
Yet India suffered two of its worst power deficits in recent years in 2021/22, mainly because of coal shortages and logistics woes. The miner aims to ramp up production by 12.4% to 700 million tonnes in 2022/23.
Analysts say expectations of higher consumption over the coming months and reports of power shortages have lead to a rally in power sector stocks.
Shares of Coal India have risen 9.8% since the beginning of March up to Friday's close, while those of top coal-based utility operators such as NTPC Ltd (NTPC.NS) and Tata Power (TTPW.NS) have grown 7.1% and 10% respectively.
Power exchange IEX's (IIAN.NS) stock is up 12.2%.
In the seven weeks between Aug. 22 and Oct. 8, when India faced widespread power deficits amid a sudden surge in power demand after a lull due to COVID-19 lockdowns, shares of Coal India rose 39%, while NTPC rose 23.6%, Tata Power rose 40.1% and IEX jumped 73.6% in that period.
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