Due to an increase in Covid-19 cases across states, the lockdowns could impact the all-India energy demand growth recovery in 1QFY22.

The all-India energy demand, however, is expected to be higher on a YoY basis due to the lower base effect as the country was under a stricter lockdown during the same period last year with subsequent gradual improvement in power demand thereafter, according to India Ratings and Research (Ind-Ra)

In March 2021, the all-India energy demand was higher by 22.8 per cent YoY at 122 billion units and the early onset of the summer season also contributed to the higher demand. On the other hand, the energy demand over FY21 was lower by 0.8 per cent YoY (9MFY21: down 3.9 per cent YoY; 1HFY21: down 8.7 per cent YoY; 1QFY21: down 15.9 per cent YoY).

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The short-term power price at Indian Energy Exchange continued its improving trend on a YoY basis (March 2021: ₹4.07/unit; March 2020: ₹2.46/kWh) with an average monthly price in April 2021 at ₹3.7/kWh.

Increase in power generation

The electricity generation increased 23.5 per cent YoY to 118.6 billion units in March 2021, supported by 29.2 per cent YoY growth in thermal generation, although hydro generation fell 7.8 per cent YoY.

Electricity generation from renewable sources increased 10.1 per cent YoY to 11.9 billion units in March 2021, with solar generation rising 21 per cent YoY. As a result, the renewable generation over FY21 improved 5.8 per cent YoY to 146.4 billion units.

The improvement in energy demand and the reduced generation from hydro and renewables sources have helped the thermal plant load factor (PLF) increase to 66.5 per cent in March 2021 (March 2020: 51.5 per cent; February 2021: 63.3 per cent).

In March 2021, the thermal sector’s PLFs rose on a YoY basis across the central, state and private sectors, increasing to 80.4 per cent (March 2020: 63.5 per cent), 63.2 per cent (45.7 per cent) and 57.9 per cent (46.5 per cent), respectively.

Despite the onset of summer season, the imposition of stricter lockdowns in major manufacturing states could impact demand from industrial segment impacting thermal PLFs. The thermal PLFs over FY21 was lower at 54.5 per cent (FY20: 56 per cent), mainly impacted by a decline in power demand, given the must-run status of nuclear, hydro and renewables.

The coal production by Coal India Limited fell by 3.8 per cent YoY to 81.2 mt in March 2021 for the third consecutive month (February 2021: down 6.6 per cent; January 2021: down 4.1 per cent).

The transmission line addition picked up substantially in FY21 and improved to 16,750 circuit km over (FY20: 11,664 circuit km), and it was higher at 4,381 circuit km in March 2021 (March 2020: 1,438 circuit km).

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