Back to old normal: Power sheds Covid load on work-from-home support

A delayed monsoon and work from home have led to an increase in domestic and agricultural demand for electricity. Peak power demand in the country increased by 5.52 per cent in June over the same month in 2019.. The rise is the highest since the beginning of the fiscal year. However, an increase in bulk demand from the industrial sector continues to be missing in several states even as localised lockdowns have been lifted and commercial activities have resumed. In terms of daily energy demand, which signifies per capita consumption, the demand level has reached that of 2019 for all.....
A delayed monsoon and work from home have led to an increase in domestic and agricultural demand for electricity. Peak power demand in the country increased by 5.52 per cent in June over the same month in 2019.. The rise is the highest since the beginning of the fiscal year.

However, an increase in bulk demand from the industrial sector continues to be missing in several states even as localised lockdowns have been lifted and commercial activities have resumed.

In terms of daily energy demand, which signifies per capita consumption, the demand level has reached that of 2019 for all regions. The national average daily energy demand (excluding the Northeast region) as of April 1 stood at 989 million units (MU), and increased to 1,078 MU by the end of June, according to the data collated by Energy Analytics Lab, IIT-Kanpur. At national level, the all-India energy demand increased by 8.6 per cent in June 2021 over the same month last year.

The delayed monsoon led to an increase in agricultural power demand, which, experts said, drove growth in the past 30 days. Till July 8, the southwest monsoon was deficient in around 41 per cent of the 694 districts of the country. Between June 1 and July 8, the cumulative monsoon was 5 per cent below normal. The rains evaded most parts of India even in the first week of July.

ICRA Ratings in a recent note said: “With the slowdown in fresh Covid-19 infections from the second half of May 2021, the state governments have eased the lockdown restrictions and this in turn has improved the electricity demand growth prospects as seen in June 2021.”

Anoop Singh, associate professor and coordinator, Centre for Energy Regulation (CER), Indian Institute of Technology, Kanpur, said: “One of the reasons for demand recovery is economic activities. The other is the postponement of consumption, which has also been realised. For instance, steel production has resumed now.”

He said the recent surge, however, was driven by agriculture and the residential segment.

“First, it is due to the weather conditions and other is the demand surge in the domestic sector. Due to work from home, per capita energy consumption has increased versus what it was when one was in an office,” Singh said.

Delhi, which allowed shops to open and public transport to resume towards the end of May, positively impacted power demand. This was also owing to record high temperatures, which resulted in purchases of cooling appliances. Followed by record peak power demand during the last week of June, on July 1 Delhi touched a record high of 7 Gw.

The case was similar in several northern states in which the monsoon was delayed. In states such as Punjab, UP, and Haryana, both agriculture and residential demand contributed to the power demand. In industrial states such as Gujarat and Maharashtra, the bulk demand from the commercial segment is still missing as economic activities remain restricted.

“As every district has different rules of lockdown and economic activities, commercial centres are running at below optimum capacity. A 100 per cent rebound of industrial power demand is yet to happen,” said a senior official in Maharashtra.

A rise in demand has improved the plant load factor (PLF) or the operating ratio of thermal power units. The all India average PLF stood at 54 per cent in May, as against 48 per cent in May 2020. ICRA, however, in its note said generation capacity addition would be led by renewable energy, in which there is a strong pipeline of projects of 38 Gw under development. This could result in the PLF in the thermal power sector remaining subdued.

Girishkumar Kadam, co-group head, corporate ratings, ICRA, said, while demand growth prospects remained favourable, the outlook for the thermal generation segment was negative and the thermal PLF was expected to remain subdued at 57 per cent in FY22.

ICRA expects all-India power generation capacity addition to rebound in FY22 to 17-18 Gw, increasing by 45 per cent on a year-on-year basis from 12.8 Gw in FY21.


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