Business News/ Industry / Energy/  Power demand hit 124.8 bn units in July, highest in 2 years: India Ratings

New Delhi: India’s electricity demand reached its highest since July 2019 to register124.8 billion units in July this year, according to India Ratings and Research.

In a reflection of revival of economic activity in the country, India’s peak electricity demand recorded an all-time high of 200.57 giga watt (GW) on 7 July. The demand is currently around 192-193 GW.

“The all-India energy demand recovered 11% yoy to 124.8 billion units (BU) in July 2021, the highest demand since July 2019. The recovery was owing to stabilising economic activities, led by the decline in the number of COVID-19 cases throughout the country," India Ratings and Research said in a statement and added, "There was a recovery of demand in all the major manufacturing states."

“With the recovery in demand, electricity generation (excluding renewables) increased 6.6% yoy to 115.6BU in July 2021, which has been the highest generation during FY22 (June 2021: up 9%). The thermal generation increased 7.4% yoy to 92BU, and the hydro generation increased 5% yoy to 19BU. The thermal plant load factor improved to 56.73% in July 2021 (July 2020: 52.92%; June 2021: 55.05%), led by the improvement in the demand," the statement said.

Also, in a reaffirmation of India’s push for green energy sources, solar and wind generation recorded an all-time high of 43.1 GW on 27 July as compared to the previously recorded high of 41.1 GW on 11 June.

“Electricity generation from renewable sources improved significantly by 27% yoy in July 2021 to 16.9BU, due to a lower base effect. The wind generation increased 53% yoy to 10.65BU, which has been the highest generation since August 2019, led by higher wind speeds within the country. Solar generation also saw a marginal improvement of 5% yoy to 4.86BU in July 2021," the statement said.

India is running the world’s largest clean energy programme to achieve 175 GW of renewable capacity, including 100GW of solar power and 60 GW of wind power by 2022.

"The average short-term price at Indian Energy Exchange increased to INR2.95/kWh during July 2021 (July 2020: INR2.47/kWh), as the difference in the buy and sell bids contracted marginally to negative 4,069 million units (July 2020: negative 4,534 million units). Additionally, the average short-term price for the first 20 days of August 2021 increased to INR4.2/kWh," the statement said.

Due to the growing demand for electricity, state-run Coal India Ltd (CIL) registered a 28.4% growth in coal offtake for the first four months of the current financial year as compared to the corresponding period last fiscal. Of CIL’s coal production target of 670 million tonne (mt) for the current financial year, the demand from the power sector is expected to account for around 545 mt.

“The coal production by Coal India Limited increased by 14% yoy to 42.6 million tonne (mt; June 2021: up 6.5%), owing to improved generation by thermal power plants. The same led to a 16.4% yoy improvement in coal offtake to 50.5mt and a 40.8% yoy reduction in the coal inventory at thermal power stations to 24mt. The offtake of coal by power sector was 80% of the total coal offtake in 1QFY22," the statement said.

This comes in the backdrop of India stopping coal supplies for a week to plants having more than 15 days stock to free up around 1.77 lakh tonne of fossil fuel, to be redistributed to power plants having low stocks. India’s power sector is the largest consumer of coal in the country, with CIL being the largest coal miner. Of India’s installed power generation capacity of 383.37 GW, coal-fuelled projects account for 53% or 202.67 GW.

“The critical or subcritical levels of coal stock as per the technical criteria continued to be nil as of 31 July 2021; however, 25 plants had less than seven days of stock. Given the continued increase in the all-India energy demand, and the low coal inventory at power stations, 74 power stations with cumulatively 95.5GW capacity (47% of all-India capacity) had less than seven days of stock as of 30 August 2021," the statement said.

Coal stocks have depleted at thermal power plants due to reasons such as increase in demand for electricity and lower generation by hydropower plants. India’s overall coal requirement is expected to go up to 1,123 mt by 2023 from the present level of 700 mt.

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Updated: 02 Sep 2021, 01:43 PM IST
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