Power demand shows signs of recovery in early September

By: |
September 18, 2020 5:00 AM

The 53.2 billion units (BU) of electricity supplied in the first 14 days of the month was 0.9% higher than the corresponding period last year, Union power minister RK Singh informed Parliament on Thursday.

Electricity consumption in the country fell 1.6% y-o-y to 109.7 BU in August, which was even 2.2% lower than July with the monsoon reducing domestic home-cooling demand.Electricity consumption in the country fell 1.6% y-o-y to 109.7 BU in August, which was even 2.2% lower than July with the monsoon reducing domestic home-cooling demand.

Power consumption in the first half of September recorded positive growth on a year-on-year (y-o-y) basis, signaling a gradual recovery of industrial and commercial activities. The 53.2 billion units (BU) of electricity supplied in the first 14 days of the month was 0.9% higher than the corresponding period last year, Union power minister RK Singh informed Parliament on Thursday.

If this trend sustains throughout the month, September will be the first month in the ongoing fiscal to post a positive growth rate in terms of power consumption. In the first five months of the fiscal, power demand has fallen 10.9% annually to 513.6 BU.

Electricity consumption in the country fell 1.6% y-o-y to 109.7 BU in August, which was even 2.2% lower than July with the monsoon reducing domestic home-cooling demand. Lower power demand is due to muted industrial and commercial activities amid sporadic lockdowns imposed across the country to contain the coronavirus outbreak. Muted power demand growth can be symptomatic of the industrial slump prevailing much before the onset of the coronavirus disruptions.

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%. In August, power demand in states like Gujarat, Maharashtra, Tamil Nadu and West Bengal — where industrial and commercial consumers comprise more than 40% of electricity usage — were lower by 3.4%, 6.2%, 5.6% and 10.9%, respectively. However, states such as Rajasthan and Madhya Pradesh — where agricultural power consumption is high — recorded annual increases of 9% and 6.4%, respectively.

Since most of the revenues of state-run power distribution companies (Discoms) 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.

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