Economy

All-India energy demand to continue to recover in 2HFY2: India Ratings

V Rishi Kumar Hyderabad | Updated on November 30, 2020 Published on November 30, 2020

The all-India energy demand in October 2020 increased 11.5 per cent y-o-y for the second consecutive month, after declining over March-August 2020 to 109.6 billion units (September 2020: up 4.0 per cent).

This was led by the demand from the northern region (up 12.9 per cent; September 2020: up 6.2 per cent) and the western region (up 18.3 per cent; up by 9.2 per cent), due to further relaxation in lockdown for economic activities, according to a power sector update from India Ratings and Research.

Even though the energy demand has been recovering, the demand over April-October 2020 came in 6.0 per cent yoy lower (1QFY21: down 15.9 per cent; 1HFY21: down 8.7 per cent).

Electricity generation (excluding renewables) increased 8.9 per cent yoy to 107.7 billion units in October 2020 (September 2020: up 4.4 per cent), owing to 13.3 per cent y-o-y growth in thermal generation, although hydro generation was lower at 10.3 per cent y-o-y.

Plant load factor

Thermal plant load factor (PLF) increased to 55.5 per cent in October 2020 (October 2019: 49.5 per cent; September 2020: 55.2 per cent) due to increased demand and sufficient coal supply at power plants. Central, State and private sector PLFs increased to 62.5 per cent in October 2020 (October 2019: 56.4 per cent), 44.2 per cent (41.3 per cent) and 59.5 per cent (50.8 per cent), respectively.

The thermal PLF over April-October 2020 was lower at 50.5 per cent (April-October 2020: 56.6 per cent), due to decline in power demand, given the must-run status of nuclear, hydro and renewables.

Electricity generation from renewable sources in October 2020 increased y-o-y by 36.6 per cent to 10 billion units with a 27 per cent yoy increase in solar and wind capacity in October 2020. Wind power generation increased y-o-y by 75 per cent to 3.6 billion units, after registering a y-o-y decline during April-September 2020.

Pricing

The short-term power price at Indian Energy Exchange increased marginally y-o-y, although continued to be low at ₹2.74/kWh in October 2020 (September 2020: ₹2.69/kWh; October 2019: ₹2.71/kWh) with a 62 per cent y-o-y increase in the traded volumes. The short-term price increased y-o-y as the difference in buy and sell bid volumes contracted to negative 3,640 million units (negative 5,848 million units).

Coal production

The coal production by Coal India Limited (CIL) increased 18.5 per cent y-o-y to 46.8mt in October 2020 (September 2020: 40.5mt), on higher production at its key subsidiaries — Mahanadi Coalfields Limited (up 44.8 per cent y-o-y), Central Coalfields Limited (up 33.7% yoy) and South Eastern Coalfields Limited (up 19.7 per cent y-o-y).

The recovery in power demand over April-October 2020 led to a gradual rise in coal off-take over the same period (October 2020: 50.50mtpa; April 2020: 39.06mtpa) and a reduction in coal inventory at thermal power stations (October 2020: 33.9mtpa; April 2020: 50.9mtpa) although it was higher 78.4 per cent y-o-y. Despite the recovery in demand, CIL’s coal supply to the power sector was lower 6.6 per cent y-o-y in April-October 2020 at 236.97 million tonnes.

The transmission line addition was lower at 11,921 circuit kilometres (km) over April-October 2020 (April-October 2019: 13,451 circuit km). The length of transmission lines added in October 2020 was lower at 380 circuit km (October 2019: 685 circuit km), with addition coming solely from the State sector.

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Published on November 30, 2020
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