Electricity demand growth muted in June despite lockdown relaxations

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Published: June 22, 2020 2:30 AM

The 58.5 billion units (BU) of electricity supplied in the first 17 days of the month was 8.9% higher than the corresponding period in May, but 13.9% down year-on-year.

The 102 BU electricity consumed in May across the country was 20% higher than the preceding month and 15% lower than the demand in the same month last year. The 102 BU electricity consumed in May across the country was 20% higher than the preceding month and 15% lower than the demand in the same month last year.

Power consumption in the first half of June remained muted despite the relaxations of the lockdown and increased household consumption due to summer heat. The 58.5 billion units (BU) of electricity supplied in the first 17 days of the month was 8.9% higher than the corresponding period in May, but 13.9% down year-on-year.

The 102 BU electricity consumed in May across the country was 20% higher than the preceding month and 15% lower than the demand in the same month last year. Experts had attributed the gradual rise in demand to higher agricultural consumption in the sowing season and increased residential usage with the advent of summer.

In May, power consumed by highly industrialised states like Gujarat, Maharashtra and Tamil Nadu was lower by 13.5%, 11.3% and 15%, respectively, Y-o-Y. However, states such as Rajasthan, Karnataka and Madhya Pradesh — the largest agricultural power users — recorded annual decreases of 5.5%, 5.8% and 7.8%, respectively.

Muted power demand growth can be symptomatic of the industrial slump prevailing much before the onset of the coronavirus disruptions, indicating that it might take more time for electricity consumption to reach pre-Covid levels. Lower electricity volumes consumed by highly industrialised states like Gujarat, Maharashtra and Tamil Nadu in FY20 had dragged down the country’s annual demand growth to a six-year low of 1.3%.

Since most of the revenues of state-run power distribution companies come from industrial and commercial customers, lower usage by these categories means additional pressure on these already-distressed entities. Industrial and commercial consumers use about 40% of the total electricity supplied, but contribute about 50% of the discoms’ revenue share.

On the other hand, auto fuel demand is reviving at a much faster pace. Consumption of petroleum products in the first 15 days of June was 80-85% of the levels recorded in the same period in 2019. Domestic consumption of petroleum products had fallen 23% year-on-year to 14.7 million tonne (MT) in May, while consumption in April, when the lockdown was the most stringent, dropped 46% annually to 9.9 MT.

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