Industrial Slowdown Leads to Decline in India’s Electricity Generation

Electricity generation in India experienced a notable decline in November 2023, primarily driven by reduced industrial activity and milder weather conditions. This drop marks the second consecutive month of decreased output, according to official data reported by Reuters. The total electricity generation for November was recorded at 134.26 billion kWh, reflecting a 1% decrease compared to October. October itself saw a significant 6% reduction in output from September.

Coal and Low-Carbon Generation Trends

A closer look at the sources reveals that coal generation fell by 5.8% year-on-year in November due to diminished demand. Despite this decline, coal remains the dominant component of India’s energy mix. In contrast, low-carbon electricity generation surged, increasing by an impressive 42% from the previous year, with total output from these sources reaching 18.55 billion kWh. This growth is attributed to significant capacity additions throughout the year, highlighting India’s commitment to diversifying its energy sources.

India has ambitious plans for expanding its renewable energy capacity, especially in wind and solar. In the first seven months of 2023, the nation added a record 25.4 GW of solar power capacity. The target for total wind and solar capacity is set at 500 GW by 2030, reflecting the government’s strategic focus on clean energy initiatives.

Challenges in Solar Energy Integration

While the rapid buildout of solar capacity is commendable, it has not come without challenges. The increase in intermittent, weather-dependent generation has heightened the risk of grid overload. In response, grid operators have been forced to curtail solar output during times of low demand and high supply. Reports indicate that some solar projects have faced output curtailment rates as high as 48% of total production, raising concerns about the economic viability of new solar investments.

According to the National Solar Energy Federation of India, solar generators have incurred losses amounting to approximately $26 million in revenues due to these curtailments since April. Compounding these issues is the slow expansion of the country’s transmission network, which is struggling to keep pace with the rapid addition of solar installations. This lag further complicates the transition towards a more sustainable energy landscape in India.

As India navigates these complex challenges, the focus remains on balancing industrial needs with the integration of renewable energy sources, ensuring both economic growth and environmental sustainability.