Power generation consistently grew at a pace of more than 5 per cent between FY16 and FY19, but it steeply fell in the last fiscal (Apr-Jan) to a mere 0.92 per cent.
Coronavirus scare and the countrywide lockdown to arrest its spread have not only put the industries and businesses on the edge but they have proved themselves to be another nail in the power sector’s coffin. Soon after the economy started to show the green shoots of revival in January and February, the power demand rose after four months of continuous decline during the economic slowdown in the country. However, after Janata Curfew and during the countrywide lockdown, the power demand has once again lost its pace, registering a fall of nearly 30 per cent. Industrial and commercial activities are accountable for up to half of the overall power demand, hence with a severe disruption in such activities, household consumption is providing some cushion to the country’s power demand.
However, it would be unfair to cite only the lockdown behind the tragic condition of the power sector. Even before the first case of coronavirus was identified in India, the power sector was struggling with a narrow demand due to a longer-than-expected slowdown.
Power generation consistently grew at a pace of more than 5 per cent between FY16 and FY19, but it steeply fell in the last fiscal (Apr-Jan) to a mere 0.92 per cent, out of which the thermal power generation grew only 0.27 per cent, according to the Ministry of Power.
The power sector is already under severe stress and the near-term outlook is grim as well. “India’s power sector performance is expected to see a significant decline in 2020-21, due to the likely prolonged disruptions caused by the Coronavirus pandemic,” said a report by Care Ratings. Altogether, the financial health of generating and distribution companies are expected to deteriorate further and stressed assets in the sector are likely to increase.