Electricity demand rises for the sixth straight month in February

By: |
March 3, 2021 3:20 AM

On an absolute basis, the 104.7 BU of electricity consumption in February was 0.1% lower than last year, mainly because 2020 was a leap year with an additional day in the month.

Lower electricity volumes consumed by highly industrialised states in FY20 had dragged down the country’s annual demand growth to a six-year low of 1.3%.Lower electricity volumes consumed by highly industrialised states in FY20 had dragged down the country’s annual demand growth to a six-year low of 1.3%.

With the sharp rise in temperatures in northern India, the average daily power demand in the country increased 3.4% to 3.7 billion units (BUs) on year in February, offsetting the impact of lower demand recorded in the southern states of Andhra Pradesh, Karnataka, Kerala and Tamil Nadu.

On an absolute basis, the 104.7 BU of electricity consumption in February was 0.1% lower than last year, mainly because 2020 was a leap year with an additional day in the month.

February marked the sixth straight month to record an annual rise in electricity demand. Electricity usage in states like Gujarat, Punjab, Maharashtra and West Bengal, where industrial and commercial requirement comprise more than 40% of the demand, grew by 3.9%, 5.5%, 1% and 9.1%, respectively. Power supply in Tamil Nadu, Karnataka, Andhra Pradesh and Kerala fell 4.3%, 3.2, 1.2% and 0.4%, respectively, compared with February 2020.

Power consumption in the country fell 8.5% y-o-y to 625.6 BU in the first half of FY21 as industrial and commercial activities remained muted amid lockdowns imposed across the nation to contain the coronavirus outbreak. Power consumption started increasing from September, and in October it was 12% higher than last year. However, the larger surge in October also reflects the effect of a lower base, as power sales in October 2019 was exceptionally muted, down 12.8% y-o-y.

Moody’s Investors Service recently upgraded the outlook for the Indian power sector from ‘negative’ to ‘stable’ as the country recorded consecutive months of power generation growth on a y-o-y basis. In the first ten months of FY21, power generation growth declined 2.9% year-on-year, compared to the rating agency’s earlier expectations of a 4-5% decline in FY21. Lower electricity volumes consumed by highly industrialised states in FY20 had dragged down the country’s annual demand growth to a six-year low of 1.3%.

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