All-India energy demand on a recovery path

The all-India energy demand contracted by two per cent y-o-y for the sixth consecutive month to 109.8 billion units during August 2020, but has shown signs of continued recovery.

According to Ind-Ra report, the decline in power demand narrowed (down 2 per cent) during August (July 2020: down 4.1 per cent; and June 2020: down 10.9 per cent). This was led by an improvement in demand from the northern and southern regions due to the further lifting of lockdown for certain economic activities under Unlock 3.0. Despite the energy demand showing signs of recovery, demand over April-August 2020 was lower by 11 per cent y-o-y.

Electricity generation (excluding renewables) declined 2.6 per cent y-o-y to 103.4 billion units in August 2020 (July 2020: up 0.1 per cent; June 2020: down 11.8 per cent), owing to a 2.4 per cent yoy decrease in thermal generation. Thermal plant load factor (PLF) declined to 49 per cent in August 2020 (July 2020: 52.9 per cent; August 2019: 51.4 per cent ) on account of the lower demand.

Central, State and private sector PLFs declined to 58.5 per cent in August 2020 (August 2019: 59.4 per cent), 38.3 per cent (42.9 per cent) and 51 per cent (52.2 per cent), respectively. Thermal PLFs were the most impacted due to the decline in power demand given the must-run status of nuclear, hydro and renewables.

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