Gas-Based Power Plants Reach 4-Year High in Capacity Utilisation This April

The plant load factor (PLF), or capacity utilisation, of gas-based power plants surged to 21.4% in April 2024, marking a four-year high for the month. This increase follows a government mandate requiring these plants to operate at optimum capacity to address India's rising electricity consumption.

With an installed capacity of 24.8 gigawatts (GW), gas-based power plants contribute approximately 2-3% of India’s total power generation. In April 2024, they produced 3.7 billion units (BU) of electricity. By comparison, coal-based power plants reported a PLF of 76.79% during the same period.

India’s overall electricity consumption in April 2024 rose nearly 10% year-on-year to 153.77 BU, with a peak demand of 224 GW successfully met. The power deficit stood at a mere 0.1%.

The Power Ministry invoked Section 11 of the Electricity Act, mandating gas-based units to run at full capacity from April to June 2024 to meet peak demand. Sources indicate that these plants will continue to operate at higher PLFs during the peak season.

The capacity utilisation in April 2024 was almost identical to the 21.5% reported in April 2021, but remains below pre-pandemic levels of 24.3% in April 2019, when they produced 4.18 BU of energy.

In FY24, the PLF for gas-based plants increased to 14.8%, up from 11.5% in FY23, with a total production of 31.30 BU against a target of 32 BU, consuming 235.78 MSCMD of natural gas. The peak power demand in 2023 reached a record 240 GW in September.

Softening LNG prices and increased gas demand from industrial and power sectors boosted trade on gas exchanges. In April 2024, the Indian Gas Exchange (IGX) traded 2.47 million British thermal units (mBtu), equivalent to roughly 62 million standard cubic meters (MSCM), a 123% increase month-on-month and 38% year-on-year.

The Gas Index of India (GIXI) for April 2024 was ₹754 or $9 per mBtu, 6% lower than in March 2024. Internationally, Henry Hub prices were around $1.6 per mBtu, while TTF was at $9.2 and the West India Marker (WIM) at $9.7 per mBtu.

India Ratings & Research (Ind-Ra) anticipates intermittent improvements in gas-based power generation during peak demand in FY25 due to stabilised gas prices. The International Energy Agency projects India’s gas demand to grow 7% year-on-year in 2024, with the Gas Exporting Countries Forum (GCEF) predicting a 6% increase.

On May 30, 2024, India’s peak power demand soared to a record 250 GW amid intense heat waves across northern, northwestern, and central India, surpassing the government’s projections of 235 GW in April and 240 GW in June.

HBL