Weekly Power Sector Round up: 3rd October 2020

Power consumption up 5.6% in September after 6 months of decline

Power consumption in India registered an increase of 5.6% at 113.54 billion units (BU) on a year-on-year basis in September after a 6 month period of decline.

Power consumption had declined due to limited economic account on account of the lockdown imposed to contain the COVID pandemic. Consumption dropped to as much as 23.2% in April.

These figures indicate that economic activity in the country is back to pre COVID levels after several relaxations in lockdown restrictions.

India’s power demand expected to drop 5.5% this fiscal

Disruptions caused by the COVID pandemic will drop India’s power demand by around 5.5% in this financial year (FY 2020-21). This, in turn, is expected to further worsen the financial profile of DISCOMs and thermal plant load factors (PLFs), according to India Ratings and Research.

DISCOM’s cash collections have been hit due to a reduction in demand from the industrial and commercial sectors for whom tariff is high due to cross subsidisation. DISCOMs inability to raise tariffs for FY 2021-22 would worsen their financial profile further.