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As key states get surplus rainfall, power demand in India declined for the second month in a row in September to an estimated 141 billion units (BUs), down 0.3 per cent on-year, according to a report on Thursday.  

Twenty key states and Union Territories (UTs), which together account for 75 per cent of the power demand pie, received rainfall 37 per cent above normal in September, according to the report by Crisil Market Intelligence and Analytics.

The on-year decline in power demand, though, was lower compared with August. For the April-September period, power demand has increased 5.4 per cent on year.

Power generation is estimated to have increased 2 per cent on-year to 152 BUs this September, more than meeting monthly demand. The generation of hydro, nuclear and renewable energy increased 40 per cent, 9 per cent and 7 per cent year-on-year, respectively, the report mentioned.

"Peak power demand is likely to have declined to 230 GW in September compared with 243 GW a year ago, which was also the annual peak," said the report. Notably, the peak power demand for September this year is estimated to have been higher than the 217 GW demand a month ago. This can be attributed to the lower rainfall in September compared with August, resulting in higher cooling requirements.

Since rainfall was in excess in the western and northern regions in September (25 per cent and 20 per cent, respectively), power demand moderated by 4 per cent and 2 per cent on-year, respectively. The southern region, on the other hand, received 16 per cent below-normal rainfall, reflected in an estimated rise of 4 per cent on-year in power demand.

"Coal remains the key source of electricity in India. To ensure uninterrupted generation, dispatch of coal to power plants surged 3 per cent year-on-year in the second quarter (July-August) of this fiscal, thereby increasing coal stocks," said the report.