Amid the lockdown, power demand declined in March and April across the country, after signs of improvement between November 2019 and February 2020, according to India Ratings (Ind-Ra).

A recovery remains unpredictable due to the uncertainty around the lockdown timeline, the rating agency said in a report.

In March, all-India energy demand decreased 8.9 per cent year-on-year (YoY) to 98.8 billion units (BU) while energy supply decreased 9.2 per cent YoY, resulting in the energy deficit remaining at 0.4 per cent (March 2019: 0.4 per cent).

Despite a reduction in power demand in March, the energy demand for FY20 rose 1.2 per cent.

With the decrease in demand, electricity generation (excluding renewables) decreased 8.8 per cent to 97.7 BU in March, with thermal generation declining 11.1 per cent YoY. The thermal plant load factor (PLF) declined to 52.6 per cent in March (February 2020: 60.4 per cent; March 2019: 62.9 per cent) on account of lower demand. Central, State and private sector PLFs decreased to 65.2 per cent in March 2020 (March 2019: 77.3 per cent), 46.1 per cent (58.8 per cent) and 47.5 per cent (55.6 per cent), respectively, said the Ind-Ra report.

Thermal PLFs were impacted most by the decline in power demand in March and April, given the must-run status of nuclear, hydro and renewables. Thermal PLFs are expected to remain low on account of the extension of the lockdown.

Power price

The short-term power price at the Indian Energy Exchange was lower at ₹2.46/kWh in March 2020 (March 2019: ₹3.12/kWh), as the difference in buy and sell bid volumes widened to negative 7,662 million units (MU; March 2019: negative 3,321MU). The traded volume on the short-term power market increased 18.3 per cent YoY to 3,971 MU on account of favourable prices on the exchange for both distribution companies and open access buyers, said the report.

Coal production by Coal India Ltd increased 6.5 per cent YoY to 84.4 mt in March 2020, owing to higher production at its key subsidiaries, Mahanadi Coalfields Ltd (up 6.6 per cent YoY), South Eastern Coalfields Ltd (up 21.8 per cent YoY) and Western Coalfields (up 16.8 per cent YoY). However, coal production over FY20 was still marginally down 0.8 per cent YoY at 602.1 mt due to an extended monsoon and protests by employees in some of the mines.

The coal inventory at thermal power stations rose 45.4 per cent YoY to 45.0 mtpa due to continued coal production, as coal is an essential service, despite the lower demand. Coal availability at pithead and non-pithead plants on 31 March 2020 remained at 19 days and 32 days, respectively.

Transmission line addition has been lower in FY20, with 11,664 circuit kilometre (km) added (FY19: 22,437 circuit km). The length of transmission lines added in March 2020 was also lower at 1,438 circuit km (March 2019: 2,868 circuit km), with 65 per cent of addition coming from the central sector, the report stated.