Indian energy demand showing signs of recovery in June amid gradual lifting of lockdown: Ind-Ra

India Ratings and Research (Ind-Ra) in its latest report has said that Indian energy demand is showing signs of recovery as the decline in power demand narrowed in June 2020 as compared to May and April which was down 14.9 percent and 22.3 percent, respectively, due to the gradual lifting of lockdown for certain economic activities and an increase in domestic consumption with the extended summer season. However, it said the power demand for June was 10.9 percent lower than the corresponding period of 2019.

According to the report, in June 2020, the all-India energy demand contracted 10.9 percent y-o-y for the fourth consecutive month to 105.6 billion units, while energy supply also decreased 10.9 percent, resulting in the energy deficit remaining at 0.4 percent as compared to June 2019, when it stood at 0.5 percent. The power demand declined for June 2020, amid the coronavirus-led lockdown, on account of a decline in commercial and industrial demand from major manufacturing states such as Maharashtra, Gujarat and Tamil Nadu.

The report further stated that with the contraction in demand, electricity generation, excluding renewables, also declined 11.8 percent y-o-y to 99.5 billion units in June 2020 with thermal generation declining 17.7 per cent year-on-year (y-o-y). Thermal PLF (plant-load factor) declined to 49.5 percent in June 2020 on account of the lower demand. Thermal PLFs were the most impacted due to the decline in the power demand over 1QFY21, given the must-run status of nuclear, hydro and renewables. The short-term power price at Indian Energy Exchange was lower at Rs 2.35 per unit in June 2020 as compared to Rs 3.32 per unit last year, as the difference in buy and sell bid volumes widened to negative 5,502 million units.