Power demand has grown at a meagre 2.2% Y-o-Y in the April-February period this fiscal, with electricity consumption contracting for the fourth straight month in November due to an extended monsoon and slowdown in economic activities.
Daily power demand in the country has fallen by a sharp 24% over the ten days to March 26, owing to reduced industrial and commercial activities, in the wake of the spread of Covid-19. Electricity requirement on March 26 was only 2,652 million units (MU), down from 3,507 MU on March 16.
Power demand has grown at a meagre 2.2% Y-o-Y in the April-February period this fiscal, with electricity consumption contracting for the fourth straight month in November due to an extended monsoon and slowdown in economic activities. In February, the demand grew a robust 10.8% year-on-year, indicating a revival, but Covid-19 has since played the spoilsport.
Sudden disruptions in power supply pose a challenge in maintaining the stability of the electricity grid. To address the issue, an emergency meeting was convened on March 20 which was attended by nearly 35 load despatch centres through video conferencing. State-run Power System Operation Corporation, which is responsible for grid stability, has also requested state- and central-level generation and transmission utilities to flag any issue impacting reliable operations of their systems.
The lower demand in seen to impact the state-run electricity distribution companies (discoms) which are finding it difficult to continue meter reading exercises and collect payments from consumers. To make matters worse for discoms, decreased consumption is mostly on account of lower usage by high paying consumers such as the railways, industrial and commercial users. Though the household sector consumes more than third of electricity supplies, it is cross-subsidised by industrial and commercial users of electricity. Tariffs on domestic consumers is on an average around 40% lower than that for industrial users of power.
The government has also allowed the movement of personnel and equipment related to electricity generation and transmission to ensure smooth power supply. According to separate notifications released by the Union ministries of power and renewable energy, exemptions have been granted from “Section 144, nationwide lockdown, or any other such limitations” to enable requisite manpower and ensure uninterrupted operations of power generating stations and electricity transmission networks. The Ministry of Home Affairs has clarified that coal mining and associated operations are also exempted from such restrictions.
The decline in power consumption is also being reflected in low utilisation levels, measured by plant load factor (PLF), at thermal power plants. PLF of coal-based power plants — many of which are anyway stressed due to lack of adequate demand and coal supply issues — touched an all-time low of 48.9% in October 2019.
In April-February, the average PLF was 56.4%, down from 60.1% in the same period in FY19. Thermal PLFs are also being impacted by the consistently-rising share of renewable energy in the power generation basket.