The Report presents an overview of the Power Sector. It discusses the reasons for de-growth in electrical energy supply in Q1 and concludes that a reduction in cooling demand due to high rainfall made the difference. It also says that going forward, cooling demand is set to play a larger role and with it, volatility in demand will rise. This could pressure certain high cost generators in years of lean power demand. The Report goes on the dissect power market dynamics pointing out the curious fact that peak demand-supply mismatch on the exchange and peak demand in the country do not necessarily coincide, especially during summer months. The fact that this mismatch is most acute during non-solar hours highlights the need for greater ESS. The Report welcomes the new VGF scheme in this spirit, saying that the incentives, though reduced are a positive sign, given the reducing trajectory of battery prices. The overview concludes with a brief look at the T&D sectors. Noticing that key schemes to rescue DISCOMs are near their conclusion, it wonders whether the same could impact the loan growth of key FIs who were riding on this wave for the past few years.SBICAPS Report on Power Sector Jul’25
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