Economy

Power demand witnesses decline for second consecutive month

?OUR BUREA Mumbai | Updated on June 04, 2020 Published on June 04, 2020

File photo   -  Bloomberg

Demand from Tamil Nadu was down 28.6 per cent; Gujarat was down 26.1 per cent

The lockdown due to the Covid-19 pandemic has resulted in a decline in power demand for the second consecutive month.

In April, the lockdown led to a decline in commercial and industrial demand from major manufacturing states. Demand from Tamil Nadu was down 28.6 per cent; Gujarat was down 26.1 per cent and Maharashtra down 17.9 per cent, according to India Ratings.

With the decrease in demand, electricity generation also decreased 25.4 per cent on a yearly basis to 81.5 billion units in April 2020 with thermal generation declining 28.5 per cent on a yearly basis. This excludes renewables. Thermal Plant Load Factor (PLF) were impacted most due to the decline in the power demand in the months of March and April, given the must-run status of nuclear, hydro and renewables, noted India Ratings.

The overall thermal plant load factor (PLF) declined to 42.4 in April 2020, compared to 63.1 per cent in April 2019 and 52.6 per cent in March 20. Thermal PLFs are expected to remain low, on account of the extension of lockdown. The decline in demand is expected to narrow due to the relaxation in the lockdown guidelines for certain economic activities and increasing power demand from domestic consumers with the onset of the summer season in some parts of India, noted India Ratings.

Short-term power price at Indian Energy Exchange (IEX), something which discoms go to when they need urgent power, was lower at Rs 2.41/kWh in April 2020 when compared to Rs 3.22/kWh in April 2019. The traded volume on short-term power market decreased 7.9 per cent year-on-year to 3,692 million units on account of the contraction in commercial demand due to the lockdown.

The coal production by Coal India Limited decreased 10.9 per cent on a yearly basis to 40.4 million tonnes in April 2020, due to lower production at its key subsidiaries. Production in Mahanadi Coalfields Limited was down 1.8 per cent on a yearly basis, South Eastern Coalfields Limited was down 16.2 per cent on a yearly basis and Western Coalfields were down 18.3 per cent due to the lower demand.

This, in turn, has led to high coal inventory. The coal inventory at thermal power stations rose 61.1 per cent on a yearly basis to 50.9 million tonnes per annum, due to continued coal production, as coal is an essential service. Coal availability at pithead and non-pithead plants on 30 April 2020 remained at 20 days and 35 days, respectively, stated India Ratings.

Transmission line addition had been lower in FY20, with 11,664 circuit kilometres added when compared to 22,437 circuit km in FY19. All this is reflected in the all-India energy demand which in April decreased 22.3 per cent on a yearly basis to 85.6 billion units and energy supply decreased 22.5 per cent on a yearly basis. This has resulted in the energy deficit of 0.5 per cent in April 20, compared to 0.4 per cent in April 2019.

Published on June 04, 2020

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