Power output continues to fall in June, even as Modi says electricity usage showing economic revival

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Published: June 19, 2020 5:00 PM

Electricity generation fell 14.5 percent on-year in the first 15 days of June, after a fall of 14.3 per cent on-year in May.

power demand, POSOCO, electricity consumptionElectricity demand is based on seasonal changes and as the temperature rises in the month of June and July, the power demand also picks up.

While the electricity demand in May shows a substantial pick up from the previous month April’s abysmally low level, the actual year-on-year comparisons show that the recovery in power output remains flat in June so far. Electricity generation fell 14.5 percent on-year in the first 15 days of June, after a fall of 14.3 per cent on-year in May, Reuters reported citing POSOCO. While Prime Minister Narendra Modi cited rising electricity consumption as a major indicator of economic revival, the comparison with the year-ago level of electricity demand has shown a steep drop in the current year. Electricity demand is based on seasonal changes and as the temperature rises in the month of June and July, the power demand also picks up.

The major fall in the electricity demand has been attributed to the western states of Gujarat and Maharashtra where the consumption fell by 24 per cent on-year. Electricity demand in Delhi also witnessed a significant fall of 30 per cent, on-year, compared to 26.8 percent decline in May. Ironically, around three-fourth of the coronavirus-related deaths that happened in India was also in these three most industrialised states of Gujarat, Maharashtra, and Delhi.

Also Read: Modi’s lending scheme for street vendors takes shape; Rs 10,000 to rebuild business under PM SVANidhi scheme

It has been estimated that the thermal power generation and distribution sector may take up to one year to recover the loss incurred by the coronavirus pandemic, according to a report by Care Ratings. Low base energy demand from industrial and commercial customers, leading to lower Plant Load Factor (PLF); advance payment for coal purchase, and softening of merchant rate are the key issues in the power generation and distribution sector, it added.

Meanwhile, Prime Minister Narendra Modi said that business activity in India is returning to normal levels with consumption and demand fast approaching pre-COVID levels. However, it is to be noted that electricity consumption varies seasonally and it can be hardly compared to the pre-Covid levels, which are the months before March 2020.

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