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.
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.
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.
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.
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