Finally, India consuming more power after 4 months of cutbacks; economic recovery in sight?

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Published: February 24, 2020 4:48:05 PM

The surge in power demand also indicates an uptick in the factory output as around 60% of the electricity produced, is consumed by the industries.

power demand, electricity generation, coal energy, IIP, industrial outputSouthern states of India have played larger roles in increasing the power demand that rose 20% in Telangana and 8% in Karnataka. (Bloomberg image)

As slowdown took the Indian economy in its grip, the power demand in India started to contract, however, indicating a turnaround, the power supply has rebound in the month of January. The conventional electricity generation increased 2 per cent on-year in January, after four straight months of a y-o-y decline, according to a Motilal Oswal report. The surge in power demand also indicates an uptick in the factory output as around 60 per cent of the electricity produced is consumed by the industries. The maximum energy-intensive sector was the industrial sector accounting for about 58 per cent of the total energy consumption in FY17, according to the Ministry of Statistics and Programme Implementation (MOSPI).

Another reason to cheer is the sharp increase in solar power generation. While the total power generation rising moderately by 2.5 per cent on-year, the renewable energy generation increased by 9.5 per cent on-year, including a 28 per cent surge in the solar generation.

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Southern states of India have played larger roles in increasing the power demand. The power generation rose 20 per cent in Telangana and 8 per cent in Karnataka. Coal-based generation increased by nearly 1 per cent, while Hydro and Nuclear generation rose by 17 per cent and 8 per cent on-year, respectively.

Meanwhile, the production of  Coal India Limited (CIL) increased by nearly 10 per cent on-year in January 2020. This, along with muted power demand, has led to an improvement in coal stocks to 19 days of consumption at the end of the month. In the same period last year, the coal stock was 12 days. Availability at NTPC plants has also recovered after heavy monsoon this year.

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