Power overdrive: Charging beyond Covid

From the lows of April, power demand has come back to normalcy (or at 2019’s levels) beginning September with the easing of lockdowns and the consequent gradual resumption of economic activities.

India’s coal-fired electricity generation rose 9.4 percent in the first half of September, provisional government data now shows with demand from industries rising for the first time since lock-downs were enforced.

This should come as much relief to the coal sector, and the economy watchers in general.

Till August, energy demand contracted for the sixth consecutive month as demand over April-August dropped 11 percent over same period of 2019.

But in that month, decline in power demand narrowed to 2 percent on year from 4.1 percent in July and 11 percent in June.

This was led by an improvement in demand from the northern region (up 1.3 percent again drop of 0.8 percent in July) and southern region (down 4.5 percent against shrinkage of 9.8 percent in July), due to the further lifting of lockdown for certain economic activities under Unlock 3.0.

In line with generation, short-term power price at Indian Energy Exchange were at Rs 2.43/kWh in August down from Rs 2.47/ kWh seen in July and Rs 3.32/kWh witnessed in August of 2019.

Power demand revives in September

Power generation in August grew 2.6 percent on year and 3.9 percent on month in the country with resumption in economic activity though, till August, generation was still down by 11 percent.

In August, demand growth, however, continued to remain negative at 2 percent. But in September demand has started surpassing 2019’s figures. On September 1, peak demand of 162 GW was 1000 MW higher than same day of 2019.

That was not one-off phenomenon as demand met on September 7 at 1,69,058 MW was also higher than the year ago demand of 1,66,909 MW.

The upward trend has continued and maximum demand met on September 10 was 1,73,500 MW which was higher than 1,71,079 MW on the same day of the previous year.

Till the first 15 days of September, country’s overall electricity generation rose 1.6 percent driven by higher consumption by industrial states such as Maharashtra and Gujarat where factories and mills reopened.

“Power demand is normalising. Effect of Covid is waning. Trend (of comparable daily power demand met) is clear. Power demand has picked up,” said power secretary Sanjiv Sahai. Rise in demand were pronounced in industrial cities and trading hubs. Electricity use in Gujarat rose 6.2 percent, whereas consumption in Maharashtra rose 4.3 percent.

The two states, among the most industrial in the country, together account for about a fifth of annual power consumption.

Power consumption by industries and offices account for half of India’s electricity demand. Most states have removed nearly all restrictions and opened up factories, even as coronavirus cases continue to surge in the country.

Coal-fired electricity generation accounted for 70 percent of India’s power output in 2019, according to India’s Central Electricity Authority. The share of the fuel in power generation fell to as low as 60 percent during the coronavirus lockdowns, as use of renewable energy for electricity generation rose.

Coal India Ltd, the world’s largest coal miner, had reported its first increase in production in five months during the month of August, driven by higher demand from power producers.

Rising coal supply to power plants

Coal despatches to the power sector by Coal India went up 1.2 percent in August, over the corresponding month of previous fiscal.