Weekly Power Sector Round up: 1st May 2021

Electricity generation falls 2.9% in second half of April

India’s electricity generation fell 2.9% in the second half of April as compared to the first half, according to the load despatch data from federal grid operator POSOCO.

Curbs on activity and movement to restrict the spread of COVID-19 likely stifled demand for power. Power supplied to Maharashtra, Tamil Nadu & Gujarat, states which account for nearly a third of the total consumption, fell 2.1%. Power supply to Karnataka fell over 15% with the state imposing a total lockdown from the 26th of April.

Lockdown constraints & second wave of COVID-19 downside risk for power demand: ICRA

New lockdown restrictions across the country imposed amidst the second wave of the COVID-19 pandemic in the country could negatively affect the power demand growth prospects for FY20211, according to the ratings agency ICRA.

ICRA group head and senior vice president (corporate ratings) Sabyasachi Majumdar said, “A prolonged second wave of Covid-19 infections and its impact on demand, particularly from the commercial & industrial segment in key industrialised states, remains a key downside risk for our earlier forecast of 6-7 per cent growth in electricity demand in FY2022. This forecast of demand growth was driven by a favourable base effect, with demand witnessing a YoY decline of 1.1 per cent in FY2021 and the expected recovery in demand from the C&I segments. The impact of a lower demand growth would be more pronounced on the thermal generation and distribution segments, considering the subdued thermal PLFs, exposure to short-term power market for thermal IPPs and the loss of revenue from high tariff-paying C&I customers for distribution utilities.”