Credit rating agency Crisil in its latest report said that power prices are expected to remain firm next fiscal (FY24) on the back of elevated demand growth of 5.5-6 per cent, and the demand is set to close this fiscal up 9.5-10 per cent over 8.2 per cent last fiscal. It also said the fear of a heat wave has seen the short-term power prices soaring by a full 151 per cent. This was on the back of a 42 per cent on-year spike in prices in February.
According to the report, the demand growth would mark a decadal high rate of growth and almost double the 20-year average of 5.2 per cent. It noted that demand growth weighed in at 7.7 per cent in February and averaged 10 per cent for the 11 months of the current fiscal despite a high base of fiscal 2022 due to extreme weather events and robust industrial and manufacturing activity. March is unlikely to see any let up amid early warnings on possible heat waves in northern and central regions this summer.
It further said that a hotter-than-usual summer with a high probability of multiple heat waves is expected to keep power demand growing even next fiscal at 5.5-6 per cent, despite two straight years of robust growth. The first half should see even higher growth.
