New Delhi, August 1: With slow pickup in economic activities, India’s energy demand improved in June compared to May, India Ratings said. Nevertheless, June’s power demand was 10.9% lower than the corresponding 2019 period.
India Ratings also said, “The energy demand is showing signs of recovery as the decline in power demand narrowed in June as compared to May and April which was down 14.9% and 22.3%, respectively, due to the gradual lifting of lockdown for certain economic activities and an increase in domestic consumption with the extended summer season.”
In June 2020, the demand for India energy decreased by 10.9 percent y-o – y for the fourth consecutive month to 105.6 billion units, while the supply of energy also decreased by 10.9 percent, which resulted in the energy deficit remaining at 0.4 percent compared to 0.5 percent in June 2019.
Regardless of a decline in commercial and industrial demand from major manufacturing states such as Maharashtra, Gujarat and Tamil Nadu, power demand declined in June 2020 in the coronavirus-led lockdown.
With the reduction in demand, electricity generation also declined 11.8 percent y-o – y to 99.5 billion units in June 2020, except renewables, with thermal generation declining 17.7 percent year-on-year (y-o).
Because of the lower demand, thermal PLF (plant load factor) declined to 49.5 per cent in June 2020. It is noted that, “Thermal PLFs were the most affected because of the decline in power demand over the first quarter of FY21, despite the must-run nuclear, hydro and renewable energy status.”
The Indian Energy Exchange’s short-term power price was lower at 2.35 per unit in June 2020 compared to 3.32 per unit last year, as the buy and sell volume gap increased to 5.502 million units negative.
India rating said, “The increased power demand in the short-term power market was on account of favourable prices on the exchanges for both distribution companies and open access buyers and the gradual lifting of lockdown.”
Meanwhile, Coal India’s coal output decreased 12.8 percent y-o – y to 39.2 million tons in June for the third consecutive month, owing to lower output at its main subsidiaries-Mahanadi Coalfields, South Eastern Coalfields and Central Coalfields led by lower demand, resulting in a high coal stockpile as well. Due to increased coal production, the coal inventory at thermal power plants rose 77.3 per cent y-o – y to 47.2 million tons per year, as coal is an important supply given the low demand.
