Electricity generation in October 2020 was higher than a year ago level but remained lower than that in the previous month. Catering to the higher power demand, electricity generation registered an on-year growth for the second consecutive month in October, said a report by Care Ratings. Electricity generation was 3 per cent higher on-year during the month but was 3 per cent lower than that in September 2020. The monthly fall was sharper in the case of renewable energy at 12 per cent contraction, against the 2 per cent fall in the case of conventional energy. However, coal power pushed up overall electricity generation during the month and helped offset the sharp fall in renewable energy generation.
While the seasonal factors are attributed to a significant fall in power consumption in the northern regions, higher demand in industries picked up the consumption in the western and southern regions, which rose to a 7 months highs in October. This also signified that unlocking led to the faster resumption in industrial and commercial activity in the southern and western regions. In the first seven months of the current financial year, the nationwide lockdown and standstill businesses took the power demand to a 3-year low and 6.5 per cent lower than that in the corresponding period of 2019-20. However, with the opening up of the economy and easing restrictions, the demand slowly started to return on track. Power demand rose 28 per cent higher than the lows of April 2020.
Meanwhile, with further unlocking of the economy, business and commercial activity are expected to be higher in the remainder of the financial year, which would result in higher power demand and consequently electricity generation. However, the extent and sustainability of the same remain uncertain due to the fluctuation in monthly electricity consumption and generation. Also, given the high number of coronavirus cases in the country, there is uncertainty regarding the imposition of fresh restrictions or lockdowns, which may further hit the economic activity and thereby power consumption. Care Ratings added that even with the unlock process, economic activity is unlikely to attain the pre-lockdown level of activity in the current financial year.