A sharp pick-up in demand for electricity as the economy gathers steam in 2009-10 and an even more substantial easing of supply constraints are expected to reduce power deficit levels in most regions, says the Load Generation Balance Report brought out by the Central Electricity Authority. The only significant exceptions are the southern region, where both the energy and peak demand is expected to worsen, and the northern region, to a less extent, where the peak deficit will continue to grow. However, overall national trends are mixed, with the energy deficit declining?the first fall over the last six years, even as the peak deficit increases marginally.
The report estimates that the country?s energy deficit will narrow marginally from 11.1% in 2008-09 to 9.3% in 2009-10. In contrast, peak energy deficits, which have fallen sharply from a peak level of 16.6% in 2007-08 to 11.9% after the 2008-09?s economic slowdown, will push up marginally to 12.6% in 2009-10. Absolute numbers show that while the energy deficit would reduce from 86,001 million units in 2008-09 to 78,429 mu in 2009-10, the peak deficit would increase from 13,024 mw to 14,978 mw.
The scenario in the states is also not very encouraging, as 28 of them are expected to have an energy deficit, while eight are likely to post a surplus. The report, which estimates power requirements based on past trends in the states, assesses the anticipated power supply position based on the availability of power in different operating stations, as well as fuel and water availability.
The scenario is especially bad in the southern region, where the energy deficit levels will increase from 7.5% to 8.6%. The sharpest fall in the deficit is in the east, which will see the 4.4% deficit transform to a surplus of 2.4%. The narrowing of the deficits in the north and northeast regions are similar, going down from 11.1% to 7.7% in the former and from 13.5% to 10.8% in the latter. The energy deficit will decline marginally from 16% to 15.2% in the western region.
The peak deficit scenario is a tad worse. While peak deficits are expected to rise sharply in the northern and southern regions, it is expected to shrink in the west, east and north east. Peak deficits in the north will soar from 10.7% in 2008-09 to 15.5% in 2009-10 while that in the south will be pushed up from 9.4% to 13.3% during the period.
The sharpest decline in peak deficit is expected in the western region and the north east. While it will shrink from 19% to 8.2% in the west it will go down from 25.4% to 14.8% in the north east. The improvement in the east is not too substantial with the peak deficit going down from 8.6% to 6.3%.
How does one account for this disparate scenario in the regions? A closer analysis shows that the difference has to do with both demand and supply factors. Let?s take the overall energy scenario first. According to the CEA estimates the growth in demand for energy, which decelerated from 7.1% in 2007-08 to 5.1% in 2008-09 is expected to pick up once again to 8.2% in 2009-10. However, supply side constraints are expected to ease faster with generation of energy picking up by 10.3% in 2009-10, from a low of 3.8% in 2008-09. The consequence is the decline in energy deficits during the period.
The scenario is distinctly different in the case of peak power where the fluctuation in demand has been sharper with the growth first decelerating sharply from 8.1% to 0.9% and then once again picking up 8.2% in 2009-10. However, the pick up in supply of peak power has not been commensurate with growth in demand, with pick up accelerating relatively slowly from 6.6% in 2008-09 to 7.3% in 2009-10.
Regional trends show that demand for energy will rise in almost all regions except the south. An encouraging sign is the sharp pick-up projected in the demand for electricity in western region, where it is projected to grow at almost thrice the pace of the previous year, with growth picking up from 3% in 2008-09 to 8.8% in 2009-10, indicating expectations of a resurgent industry.
The northern region, which has also been affected by the slowdown, will see demand pick up once again from 3.3% to 6.3%. The trends are similar in both the east and northeast, though the revival in demand is more subdued. The only exception to this is the south, where demand continued to be buoyant even in the slowdown and where growth is now expected to decelerate from 8.7% in 2008-09 to 7.9% in 2009-10.
The demand scenario in case of power at peak levels is also expected to pick up in almost all regions, except the northeast, where it is projected to fall marginally. The highest increase in demand for peak-level power is expected to be in the eastern region (17.1%), followed by the south (8.4%) and the north (7.3%). However, the demand or peak power, which declined by 2.7% in 2008-09, will move up only marginally to 0.2% in 2009-10.
Regional trends in supply are, however, much more disparate. Energy supply is expected to increase at a very high rate in the eastern and northeastern regions, with growth picking up from 8.8% in 2008-09 to 19.3% in 2009-10 in the eastern region and from 5.5% to 17.9% in the northeast. The northern region will also show a substantially improved performance, with energy supply picking up from 3% to 10.4%. Though the increase in energy supply in the west (9.9%) and the south (6.6%) are much lower, they are still significant improvements over the previous year.
In the case of peak-level supply of power also, the prospects of the eastern region is projected to be most buoyant, with growth picking up from 10.2% in 2008-09 to 20.2% in 2009-10, followed by the western region (from 2.6% to 13.7%) and the northeastern region (from 0.8% to 13.2%). However, the supply of peak power is expected to slow in the southern region (from 7.7% to 3.7%) and to pick up only marginally in the northern region from zero to 1.6%.