POWER

All-India electricity demand likely to contract by 5-6% in FY2021: ICRA

With the re-imposition of lockdown restrictions in many parts of the country, all-India electricity demand is likely to decline by 5 per cent to 6 per cent in FY21 over FY20, against ICRA’s April 2020 estimate of 1 per cent de-growth.

The revised energy demand de-growth estimate assumes decline of 3.5–4 per cent in Q2 and Q3 FY21 and a marginal recovery of about 1 per cent in Q4 FY21, given the slower pace of recovery expected in industrial and commercial activity in the country.

This, in turn, is expected to suppress the thermal PLF on an all-India level to 50-51 per cent in FY21 against the rating agency’s earlier estimate of 54 per cent and from 56 per cent in FY20.

The all-India electricity demand declined by 16.2 per cent in Q1 FY21 on a year-on-year (Y-o-Y) basis, because of the lockdown imposed to control the Covid-19 pandemic. While demand recovered from a Y-o-Y decline of 23.1 per cent in April 2020 to 10.9 per cent in June 2020 and further to 3.9 per cent in the first 15 days of July 2020, the recovery was slower than earlier expectations of reaching the pre-Covid-19 level in July 2020.

Sabyasachi Majumdar, Group Head & Senior Vice President, Corporate ratings, ICRA, says, “The decline in energy demand has thus, adversely impacted the revenues and cash collections of power distribution utilities (discoms),

Source
the hindu businessline
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