All-India electricity demand to decline in May 2021, despite peak summer season: Ind-Ra

  • This is on account of the continuation of COVID-19 led restrictions put out by certain states till May 31, 2021, Ind-Ra said in a report

  • With COVID cases peaking in May and announcements by certain states to open up from June, Ind-Ra expects energy demand to start recovering from June 2021, it added

New Delhi: India Ratings and Research (Ind-Ra) has said in a report that it estimates the all-India electricity demand would decline in May 2021 on a month-on-month basis, despite the peak summer season, and will remain below pre-pandemic levels. “This is on account of the continuation of COVID-19 led restrictions put out by certain states till May 31, 2021. With COVID cases peaking in May and announcements by certain states to open up from June, Ind-Ra expects energy demand to start recovering from June 2021,” said the ratings agency in a report on Friday.

In the first 25 days of May, the all-India electricity demand was 88.8 billion units (May 2020: 102.6 billion units; May 2019: 120.7 billion units). In April 2021, the all-India energy demand was higher by 39.3 percent y-o-y at 118.4 billion units (March 2021: up 22.8 percent) due to the lower base effect and the early onset of summer contributing to the higher demand. The short-term power price at Indian Energy Exchange (IEX) remained high at Rs 3.70/kWh in April 2021 (March 2021: Rs 4.07/unit; April 2020: Rs 2.41/kWh) on account of a high demand from the short-term power market.

All-India electricity generation up 42.5% in April

The electricity generation increased 42.5 percent y-o-y to 115.5 billion units in April (March: up 23.5 percent), supported by 55.4 percent y-o-y growth in thermal generation (up 29.2 percent y-o-y), although hydro generation fell 18.4 percent y-o-y (down 7.8 percent y-o-y). Electricity generation from renewable sources increased 17.9 percent y-o-y to 11.7 billion units in April, with solar generation increasing 41.5 percent y-o-y.

ALSO READ

1. Power Ministry transfers Srinagar Leh Transmission system to Power Grid

2. Bhutan, Bangladesh to join IEX’s Cross Border Electricity Trade platform soon

The improvement in energy demand and the reduced generation from hydro generation have helped the thermal plant load factor (PLF) increase to 66.7 percent in April (April 2020: 42.2 percent; March 2021: 66.5 percent). In April 2021, the thermal sector’s PLFs rose on a y-o-y basis across the Central, state and private sectors, increasing to 78.4 percent (April 2020: 52.0 percent), 60.3 percent (33.5 percent) and 62.0 percent (41.6 percent), respectively.

Coal production by CIL improved marginally by 3.8%

The coal production by Coal India Limited (CIL) improved marginally by 3.8 percent y-o-y to 41.9 million tonne in April, after falling for three consecutive months (March 2021: down 3.8 percent; February 2021: down 6.6 percent; January 2021: down 4.1 percent). The gradual recovery in power demand over June 2020-April 2021 led to a gradual rise in coal offtake over the same period, and coal inventory at thermal power stations on 31 April 2021 fell by 53.5 percent y-o-y to 23.9 MTPA, owing to the improved demand and lower coal production. Although as per technical criteria, the number of coal-based power plants with critical or subcritical levels was nil on April 30, there were 38 plants with less than seven days of coal stock.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)