Economy

Pandemic trips FY21 capacity addition in conventional power sector

G Balachandar Chennai | Updated on April 30, 2021

Industry analysts attribute the poor capacity addition in the energy sector to the lockdown-led to supply side disruptions   -  The Hindu

Capacity addition down 23 per cent during the year; industry is cautiously optimistic about FY22

Capacity addition in the conventional power sector (includes thermal, hydro and nuclear) slowed down and dropped by 23 per cent in pandemic-hit FY21 when compared with the new capacity added in the previous year.

After hitting low levels in 2018-19 in terms of new addition, the conventional power sector saw improvements during 2019-20.

But in the last fiscal, the new addition declined, and the segment added just 5436 MW of new capacity as against 7065 MW new capacity in FY20. This is one of the lowest annualised additions in the recent decade.

Of the 5436 new capacity in FY21, thermal sector added 4926 MW, down from 6765 MW in FY20, while hydro sector brought in 510 MW, up from 310 in the previous year, according to Central Electricity Authority data.

Renewable energy sector too added 16 per cent lower capacity at 7356 MW in FY21 as compared to FY, while missing the capacity addition target for the 5th year in a row.

Also read: Wind energy can create 3.3 million new jobs worldwide over next five years: GWEC

Industry analysts attribute the poor capacity addition in the energy sector to the lockdown-led to supply side disruptions (which slowed movement of inputs and has led to an increase in their prices), labour shortages as well as the constrained finances and liquidity pressures faced by the developers.

Total capacity

As of March 31, 2021, India’s total installed capacity (including thermal, nuclear, hydro and renewable) stood at 383,151 MW. In this, the coal-fired segment’s share was 202,674 MW, while renewable energy sources accounted for 94,433 MW. Though the gap is wide, renewable is the second big segment after the coal sector and maintains faster growth in new capacity addition.

Western region continues to lead in coal-fired power capacity at 74,320 MW, while the Northern region replaced the Southern region as the No.2 region with a total installed capacity of 54,827 MW capacity. Southern region’s coal-fired capacity stood at 44,904 MW.

In renewables, the southern region is No.1 with a total capacity of 44,600 MW, accounting for about 47 per cent of the country's total renewable installed capacity. Western region is No.2 with a total installed capacity of 29,252 MW, followed by Northern Region (18,591 MW).

Outlook

While industry analysts expect the power generation and consumption to improve in this fiscal year with the anticipated higher levels of economic activity along with the roll out of an effective vaccination programme, the uncertainty pertaining to the effective control of the second wave and the likelihood of prolonged lockdowns or restrictions may derail the recovery process.

Published on April 30, 2021

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